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Regulatory Disputes Notes

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Regulatory Disputes Revision

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Advanced Commercial Litigation Regulatory Disputes Reporting to the FCA Firms have an obligation to report in Principle 11 FCA Principles of Business and SUP

15.3. Additionally individuals have an obligation to disclose under Principle 4. After the report has been disclosed the firm should:
- Contact their customers and make them aware of the report and disclosure under Principle 6
- The firm must also take steps to stop any breaches and deal with any underlying problems
- Employees may also need to be suspended and be investigated
- The firms should be careful about document creation and destruction (be careful of s.177 FSMA)
- Insurers should be notified

FCA Powers Sanctions If the investigate then the following sanctions can be imposed:

1. Fines - the amount is unpredictable although can be reduced if they reach a settlement at an early stage, up to 30% off is available

2. Restitution Orders - made by the firm to pay back the money lost

3. Injunctions - preventing acts or omissions of the firm or individuals

4. Insolvency proceedings

5. Revoke authority - the firm and individual's authority to carry out regulated activities

6. Criminal prosecutions Third Party Claims Firms may face claims under s.138D FSMA which allows those who have suffered loss as a result of an unauthorised person to make a claim. Claims can be made by third parties such as employees and customers (such as breach of contract, misrepresentation and negligence). Claims can also be referred to the Financial Ombudsman. Publicity Under s.391(1) FSMA the FCA can freely print information about a warning notice as long as the firm has been consulted. In relation to Decision and Final Notices the FCA must publish information that it considers appropriate (s.391(4) FSMA). However, the FCA cannot publish information that would be unfair, prejudicial to consumers or detrimental to the financial system in the UK (s.391(6) FMSA).


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