Thu. Jun 20th, 2019

Planet Compliance

Innovation & Regulation in Finance

The FCA bans former compliance officer

3 min read

The Financial Conduct Authority (FCA) has banned Mr Peter Johnson, former compliance officer of Keydata Investment Services Ltd (Keydata), from performing any function in relation to any regulated financial activity and publicly censured him.  Were it not for Mr Johnson’s serious financial hardship, the FCA would have fined him £200,000.

The FCA has found that Mr Johnson failed to act with integrity in his role as Keydata’s compliance officer and misled the then Financial Services Authority (FSA) on a number of occasions.

The Final Notice follows Mr Johnson’s withdrawal of his reference to the Upper Tribunal.  Proceedings continue in the Upper Tribunal with respect to the references made by Mr Stewart Ford, Keydata’s former CEO, and Mr Mark Owen, Keydata’s former Sales Director.

Keydata designed, launched and, via IFAs, distributed structured investment products to retail customers. Keydata went into administration on 8 June 2009 and was dissolved on 2 July 2014. Prior to its administration, Keydata had £2.8 billion of its own and other institutions’ investment products under administration. During the Relevant Period (26 July 2005 to 8 June 2009) Keydata designed, launched and distributed four investment products which invested primarily in US senior life settlement policies: the SIB, the SIP, the Income Plan and the DIP.

Mr Johnson held Controlled Functions 10 (Compliance oversight) and 11 (Money Laundering Reporting) from the start of the Relevant Period until 1 December 2008 and held Controlled Function 30 (Customer) throughout the Relevant Period.

As Keydata’s Compliance Officer, Mr Johnson was responsible for carrying out the due diligence, overseeing the verification and approval of the financial promotions in respect of the Products (in particular the SIB 1 and 2 and the SIP 1) and Keydata’s compliance with regulatory standards. In relation to the due diligence of the SIB 4 and the SIP 1, Mr Johnson was heavily involved in the collation and assessment of the due diligence data and reported his findings to the Keydata board of directors.

After 1 December 2008 Mr Johnson was Keydata’s Operations Director but was not appointed to the Keydata board of directors. In this role Mr Johnson retained responsibility for Keydata’s dealings with the Authority in relation to the Products, and the Authority considers that, as Operations Director, he continued to have some responsibility for Keydata’s compliance with regulatory requirements in relation to the Products.

The FCA statement and related information is available here.

 

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