Stuart Brothers successfully helped defend a pensions and life insurance company against a claim made by the FSA (now the FCA). The company advised on transfers from defined benefits schemes to personal pensions.
The FSA carried out an onsite review of the way in which the defined benefit files were transferred but expressed serious concerns. The matter was referred to their enforcement group with a view to bringing disciplinary action against both Stuart’s client – who faced a substantial fine – and its senior managers.
At the same time, the pension and life insurance company’s parent company were undergoing a change in controller, meaning the added regulatory scrutiny would have had serious knock-on effects.
The company contacted Stuart to defend them. Stuart said, “I formed the view that the actions of the FSA were both procedurally and substantively misplaced. By not asking the client for feedback on their findings, the FSA shouldn’t have taken such pre-emptive action as to threaten to impose a fine.”
Stuart undertook a review of over 200 relevant files from the pensions and insurance company. He then provided his own analysis – which differed substantially from the FSA’s – and recommended a meeting between the client and the FSA member responsible for the review.
He felt that by coming together, they could build a plan for corrective action. The meeting lasted an entire day, but the outcome was a positive one. The FSA agreed that disciplinary action would not be taken and agreed with the actions that would be taken by the client going forward.
Thanks to Stuart’s review of the files and suggestion of a summit between the client and the FSA, the risk of a fine and adverse publicity was removed. It also strengthened the regulator’s confidence in the pension and insurance company’s compliance and governance.