A former head of compliance at an investment management firm who once worked as a compliance inspector for a U.K. financial services regulator was fined 416,558 pounds (U.S. $513,000) and banned from working in the financial services sector following a tribunal ruling announced Monday.
Thomas Ward was one of five directors from three financial advisory firms—Financial Page, Henderson Carter Associates, and Bank House Investment Management—who were collectively fined more than £1 million (U.S. $1.2 million) in 2019 and banned from the industry for investing customers’ pensions in unsuitable high-risk products to rack up their own fee income.
The Financial Conduct Authority (FCA) found Ward, alongside Andrew Page, Aiden Henderson, Robert Ward, and Tristan Freer, failed to “act with integrity.”
Their investment advice resulted in losses of more than £50 million (U.S. $61.6 million) for more than 2,000 customers, according to the FCA.
All five individuals sought to contest the original FCA decision notices issued against them in 2019.
In a 300-page judgment, the tribunal agreed with the FCA’s contention that Thomas Ward was a “de facto” director at Financial Page and not an approved person, so he should never have been involved in running a financial services firm. His previous conduct and employment history ensured he would never be FCA approved.
Between 1995-96, Ward was a senior inspector at one of the FCA’s predecessor regulators, the Securities and Futures Authority (SFA), where he worked for 12 months carrying out compliance reviews on regulated firms.
In 1996, he became head of compliance and operations at SG Investment Management (SGIM), later becoming global head of operations and administration and an executive director at the firm.
He was fired in October 1999 following allegations of misuse of an expense account debit card, withdrawal of cash from an office safe for personal use, and authorizing transfers from a suspense account to an account in his own name. SGIM notified the SFA of Ward’s termination so the regulator could withdraw his approval as a director. The SFA then initiated an investigation into Ward’s conduct.
In April 2001, Ward was convicted of six counts of obtaining a money transfer by deception and sentenced to 12 months imprisonment.
The SFA considered taking action to prohibit Ward from being authorized to work in a controlled function on the grounds his criminal conviction and the surrounding circumstances indicated he was dishonest and should be prohibited. However, it appears the regulator thought because Ward was unlikely ever to be granted approved person status in the future, there was no need to spend money on an investigation (even though Ward could continue to conduct financial services work where approval was not required).
Instead, the SFA stopped its disciplinary proceedings but told Ward the documentation would be held on record. If he ever applied for permission to carry out a controlled function again in the future, the regulator would refer to this evidence to turn his application down.
The tribunal found Ward tried to downplay his role and his involvement in work he was not authorized to carry out, even feigning ignorance to the FCA he was unaware of what constituted a controlled function (despite his previous experience working for a regulator).
The FCA found Ward tried to absolve himself from being implicated in any conflicts of interest or compliance duties by pushing responsibility for them onto Page, the company’s founder, even though he knew the conduct and behavior would never pass regulatory scrutiny. He also changed the nature of his communications with Page once he knew the company was being investigated.