In September 2016, we reported on the Decision Notice in the case of Andrew Tinney. In summary, the RDC found that Tinney had recklessly made misleading statements and omissions to colleagues, and to the New York Fed, as to the nature and/or existence of a report that had been commissioned to examine the culture of Barclays Wealth Americas. The RDC also found that certain representations made to the FCA and the ICAEW regarding these matters had been misleading. As a result, the RDC decided to issue a public censure and a partial prohibition, barring Tinney from holding any senior management / significant influence function. You can read our full report of the case from Enforcement Watch 20 "Andrew Tinney appeals Decision Notice".
Tinney referred the Decision Notice to the Upper Tribunal, seeking a direction that the FCA should take no action against him. Following a rehearing of the issues, the Tribunal agreed that Tinney had been reckless as to whether certain notes might give the impression that the report did not exist and, as a result, that he had acted without integrity in breach of APER1. However, the Tribunal found that the FCA had not made its case that Tinney had made false or misleading statements in relation to the report following a request from the New York Fed.
As foreshadowed in our earlier commentary of this case, notwithstanding the findings of the RDC, the FCA sought to reinstate arguments in the Upper Tribunal that Tinney's actions were deliberate rather than reckless. As well as maintaining its arguments on prohibition, it also argued that the RDC had erred in its failure to issue a financial penalty.
As regards financial penalty, the FCA argued that in circumstances where a lack of integrity amounting to a breach of APER 1 had been found, the most serious non-criminal misconduct an approved person could commit, the decision to impose a public censure rather than a financial penalty was plainly wrong. The appropriate sanction, it said, was a financial penalty in all but the most exceptional cases, and it pointed to the RDC's failure to refer to the guidance in DEPP6.5B (Determining the appropriate level of financial penalty) in the Decision Notice. Tinney urged the Tribunal to consider the overall guidance in DEPP 6 (including considering whether deterrence can be achieved with a public censure) and the relevant case law, including Parker v FSA (2006) at , which says:
“The Tribunal should, we consider, be slow to increase a penalty save in a case where the RDC has plainly misdirected itself and the penalty imposed falls substantially below a proper amount, since its doing so might otherwise act as a disincentive to the making of meritorious references.”
The Tribunal found that the RDC had set out in its Decision Notice detailed reasons for a public censure, and although it had not referred to DEPP6.5B in the Decision Notice, the RDC must have taken those factors into account in reaching its decision. A public censure as opposed to a financial penalty was clearly right in the circumstances of the case as found by the RDC, and even more so in light of the lesser findings of the Tribunal.
In respect of the partial prohibition, the Tribunal was not satisfied that the decision to make a partial prohibition was within the range of reasonable decisions open to the RDC. The Tribunal remitted the decision back to the FCA asking it to consider, in particular, the Tribunal's findings that there was no misconduct in relation to the New York Fed's request, the length of time that had passed, and Tinney's good disciplinary record. It was also noted that no consumers had been harmed. As a result, the FCA did not impose a partial prohibition.
The assessment of whether Tinney's conduct was deliberate or reckless, and consequently, whether, or to what extent he lacked integrity was a plainly a live issue in this case. The Tribunal grappled with the meaning of integrity, pointing to shortcomings in the definition as stated in Hoodless and Blackwell (2003) and citing Vukelic v FSA (2009) which noted, at , that integrity remained a concept:
"elusive to define in a vacuum but still readily recognisable by those with specialist knowledge and/or experience in a particular market".
The concept of integrity, insofar as it relates to actions that are deliberate versus those that are reckless, will plainly continue to be a topic of debate, especially as it relates to sanction. It will surprise some that a finding that an individual lacks integrity in breach of APER 1 may not necessarily lead to a prohibition. In that connection, it may be of interest to readers that the protracted length of the proceedings appeared to impact in part on the Tribunal's views on whether a partial prohibition was appropriate, as well as Tinney's genuine remorse. The Tribunal also agreed with Tinney that the primary purpose of prohibition was to protect the public, not to punish the individual.
Overall, this case no doubt left the FCA feeling disappointed.