Since the last update, the outcome of one disciplinary tribunal, five consent orders, made by the Investigation Committee, and three fixed penalties have been published.
The disciplinary tribunal resulted in a member being severely reprimanded, suffer financial penalty of £2,100 and be required to pay costs because that member had issued letters that included the following statement of approval, “We have reviewed the memorandum of information and have approved it for the purposes of Section 21 of the Financial Services and Markets Act 2000 (FSMA),” when that member knew neither they nor their firm were authorised by the Financial Conduct Authority (FCA) to do so. And/or that statement was not caveated by an explanation regarding its purpose.
Consent orders were made and published by the Conduct Committee in the following cases:
An insolvency practitioner (IP) was severely reprimanded and fined £18,000 because, in relation to the proposed liquidation of a limited company, the IP failed to comply with paragraph 10 of Statement of Insolvency Practice 6 and/or the Fundamental Principle of Professional Competence and Due Care set out at paragraph 2100.1 A1 in the Insolvency Code of Ethics (effective 1 May 2020) by failing to ensure the director was made fully aware of their duties and responsibilities in convening the members’ meeting and creditors’ decision procedure.
The IP also repeatedly failed, in respect of that same proposed liquidation, to ensure a response was sent, either at all, or on a timely basis, to correspondence in breach of the Fundamental Principle of Professional Competence and Due Care set out at paragraph 2100.1 A1 in the Insolvency Code of Ethics (effective 1 May 2020).
In relation to another proposed liquidation of another limited company, that same IP failed to comply with paragraph 10 of Statement of Insolvency Practice 6 and/or the Fundamental Principle of Professional Competence and Due Care set out at paragraph 2100.1 A1 in the Insolvency Code of Ethics (effective 1 May 2020) by failing to ensure the director was made fully aware of their duties and responsibilities in convening the members’ meeting and creditors’ decision procedure.
Another licensed IP was severely reprimanded and fined £15,000 for multiple failures as a nominee of the Individual Voluntary Arrangements (IVAs) in four separate cases including:
- failing to properly conduct the initial advice call, contrary to the following paragraphs of Statement of Insolvency Practice 3.1 effective from 1 July 2014;
- failing to properly calculate the debtor’s disposable income contrary to paragraph 13(d) of Statement of Insolvency Practice 3.1 effective from 1 July 2014; and/or
- failing to ensure that the debtor was given appropriate advice to be able to conclude that an IVA was the most suitable debt solution, contrary to paragraph 12(e) of Statement of Insolvency Practice 3.1 effective from 1 July 2014; and
- failing to pay a dividend in accordance with modified IVA Proposal terms contrary to paragraph 16(b) of Statement of Insolvency Practice 3.1 effective from 1 July 2014.
A member was severely reprimanded and fined £8,000 because they had failed to prepare the accounts of a client and also failed to respond to a professional enquiry letter as required by subsection R320.7C of ICAEW’s Code of Ethics (effective from 1 January 2020) or provide the information requested in a professional enquiry letter as required by subsection R320.7D of ICAEW’s Code of Ethics (effective from 1 January 2020) both in respect of five separate clients.
A firm was severely reprimanded and fined £5,500 because it had firstly issued two different versions of an assurance report on Client Assets to the Financial Conduct Authority when the reports failed to comply with SUP 3 Annex 1R issued by the Financial Conduct Authority and/or Client Asset Assurance Standard issued by the Financial Reporting Council.
And further it issued three versions of an assurance report on Client Assets to the Financial Conduct Authority which stated that the firm carried out procedures in accordance with the Client Asset Assurance Standard issued by the Financial Reporting Council when it did not, in that (a) it failed to identify the scope of the limited company’s permissions given by the Financial Conduct Authority; and/or (b) it failed to identify and report that the limited company held custody assets when the limited company did not hold custody assets.
Another member was reprimanded and fined £1,250 for the following compliance failures over three years:
- engaging in public practice without holding a practising certificate contrary to Principal Bye-law 51a;
- failing to notify the Members’ Registrar of ICAEW that they had engaged in public practice within 28 days as required by the Information to be supplied by members regulation 3 (effective from 1 December 2010); and
- failing to ensure their firm was supervised by an appropriate anti-money laundering supervisory authority contrary to regulation 8, and parts 1—6 and 8—11 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
All the above consent orders came with a requirement to pay costs.
Three fixed penalties were publicised in the period. One to a member who engaged in public practice for a year without holding an ICAEW practising certificate, one for a conviction of drink driving and one for a conviction of dangerous driving.
Further details can be found on our Disciplinary Database or please visit our Public Hearings page.