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Financial services investigations and enforcement monthly round up - September 2019

A round-up of recent enforcement actions and investigations in the financial services sector.

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The Pensions Regulator launches prosecution against director

  • Company director Michael Woolley is being prosecuted by The Pensions Regulator (TPR) for failing to provide information and documents requested as part of an ongoing investigation.
  • Mr Woolley was asked to provide information about investments made by Southbank Capital Limited, of which he is a director and shareholder. The investments relate to money and assets relating to 16 pension schemes for which PIM Trustees Limited is trustee. Mr Woolley is also sole director and a shareholder of PIM Trustees Limited.
  • Mr Woolley is accused of failing to comply with a notice issued under section 72 of the Pensions Act 2004 and will appear at Brighton Magistrates' Court on 13 November 2019.

FCA brings first prosecution for destruction of documents

  • In a press release published on 6 September 2019, the FCA announced that it had brought its first prosecution for destruction of documents under the Financial Services and Markets Act 2000 (FSMA)
  • Konstantin Vishnyak appeared at Westminster Magistrates' Court in relation to one count of destroying documents that he knew or suspected were or would be relevant to an investigation, in breach of FSMA.
  • The FCA alleges that Mr Vishnyak, who was being investigated for suspected insider-dealing offences, deleted the Whatsapp application from his phone after being required to provide it as part of the FCA's investigation.
  • Mr Vishnyak pleaded not guilty and will appear at Southwark Crown Court on 4 October 2019.

SFO releases Corporate Co-operation Guidance

  • The SFO has released its long-awaited guidance, which seeks to provide transparency around what co-operation is required by a corporate that is seeking leniency from the SFO.
  • The guidance provides some general good-practice tips for corporates who wish to co-operate, including; how and what material should be provided, guidance on providing digital material and preserving passwords and digital keys.
  • The guidance does raise further issues around internal investigations and what is expected to be carried out prior to disclosure to the SFO. It suggests that corporates should consult with the SFO before interviewing potential witnesses or suspects or taking HR action.
  • All corporates with a UK nexus are advised to review the guidance and ensure internal processes would meet the SFO's requirements when it comes to co-operation.

Prison sentences for money-laundering higher than ever

  • Research by Thomson Reuters has shown an 8% increase in average prison sentences for money-laundering offences.
  • The research suggests prosecutors might be seeking prison sentences as better deterrents for these types of offences, as the number of fines issued has dropped in the same period.

PRA publishes letter on Money Laundering/Terrorist Financing risks in prudential supervision

  • On 5 September the Prudential Regulation Authority (PRA) has published a letter sent to the CEOs of PRA-regulated firms highlighting its support of the European Banking Authority (EBA) opinion on money laundering and terrorist financing (AML/TF) risks in prudential supervision, published in July 2019.
  • The PRA reiterates its commitment to considering AML/TF concerns in its prudential assessments of firms. It also reminded readers that it is the responsibility of firms to ensure that members of the management body are 'fit and proper' and governance processes are effective enough to allow firms to perform their duties in relation to AML/TF.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at September 2019. Specific advice should be sought for specific cases. For more information see our terms and conditions.

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