UK Regulator Fines, Bans Senior Investment Firm Executives For Misleading Clients

Tom Burroughes

7 October 2013

The Financial Conduct Authority, the UK regulator, has punished two senior executives at UK-based Catalyst Investment Group after their firm “recklessly misled” clients over bond sales.

The case has been referred to the FCA’s Upper Tribunal, which may uphold, vary or cancel the decision, the FCA said in a statement on Friday.

The watchdog fined former CEO Timothy Roberts £450,000 and banned him from the financial services industry; it fined former director Andrew Wilkins £100,000 and prevented him from holding senior roles in future.

“The decision notices reflect the FCA’s view of events and of Roberts and Wilkins’ behaviour,” the watchdog said.

Catalyst has also been censured by the FCA for recklessly misleading investors when promoting bonds offered by ARM Asset Backed Securities SA between November 2009 and May 2010.

Roberts was CEO of Catalyst and a director of ARM from March 2007. The FCA found Roberts had recklessly approved unfair and misleading communications to investors. Wilkins was a director at Catalyst between October 2007 and March 2010. The FCA found he allowed Catalyst to continue promoting ARM bonds and approved misleading communications to investors, the statement said.

“The FCA found that both men failed to act with due skill, care and diligence, and Roberts’ conduct demonstrated a lack of integrity. Furthermore they both failed to inform Catalyst’s compliance officer of the fact that ARM believed it needed a licence to issue the bonds until December 2009,” it said.

UK investors have invested £54 million in ARM bonds, including £17.1 million in un-issued ARM bonds, and may lose a significant part of their investment.