Investment companies and charges of misconduct

As has been well publicised, the Upper Tribunal recently issued an important decision clearing John Pottage of misconduct in carrying out his CF3 and CF8 functions while he was CEO at UBS Wealth Management (UK) Limited and UBS AG. In so doing, it directed the FSA to take no action against him (overturning the £100,000 fine the regulator had sought to impose).

The decision undoubtedly represents a set-back for the FSA in the pursuit of its credible deterrence strategy against ever more senior individuals, particularly those at large firms, and provides a welcome reminder as to the degree of culpability that is required before an approved person is guilty of misconduct. However, the FSA (and in turn the FCA) will continue to target high profile, senior managers and it would be unwise for anyone to derive too much comfort from a case that was ultimately decided on its facts.