(1) Arch Financial Products LLP, (2) Robin Farrell, (3) Robert Addison v Financial Conduct Authority

The Upper Tribunal has given an important judgment on regulatory standards in the financial services sector in relation to integrity and the management of conflicts of interest.

The case concerned alleged misconduct by the investment management firm Arch Financial Products LLP (Arch), its chief executive Robin Farrell, and Robert Addison, a senior partner and former compliance officer.

The Tribunal upheld the decisions of the Financial Conduct Authority (FCA) to issue a public censure against Arch, to prohibit Mr Farrell and Mr Addison from performing any role in regulated financial services, and to impose penalties of £650,000 and £200,000 on Mr Farrell and Mr Addison respectively. The Tribunal also upheld the FCA’s decision that it would have fined Arch £9 million for its misconduct, were it not for the firm’s financial position.
 
The Tribunal held that Arch, Mr Farrell and Mr Addison were reckless as to whether they had managed the conflicts of interest in four specific transactions fairly, and so lacked integrity, and that they failed to ensure that Arch adequately identified and took appropriate steps to mitigate and record the conflicts of interest in its business.

The Tribunal found further deficiencies in how Arch segregated and controlled its access to, and use of, non-public information in its business, and further failures by Arch and Mr Addison in relation to Arch’s compliance monitoring procedures. It did not uphold the FCA’s findings about the liquidity and spread of risk in certain funds managed by Arch.

The judgment is available at:
http://www.bailii.org/uk/cases/UKUT/TCC/2015/13.pdf

Monica Carss-Frisk QC and Iain Steele acted for the FCA.