Let me explain.
There were 2 Winslow films, one starring Robert Donat in 1948 and the one with Yes Minister’s Nigel Hawthorne in 1999. Both derive from a Terence Rattigan play in which young Ronnie Winslow is accused of stealing at a naval school and without due process is expelled.
The rest of the film is the father’s obsession with clearing his son’s name. He eventually wins but only with profound damage to his family. Young Ronnie has all but forgotten the case and the whole thing is very much a pyrrhic victory.
So where does CP20/11 fit in? Well we are back to regular theme, namely the regulator’s desire to avoid of due process.
You probably know that the regulator has a high level of protection, particularly from legal attack. The exception is a proven act of bad faith and bizarrely, infractions of the Human Rights Act.
Even if you have a case for bad faith, you are confronted by an uphill task as the FCA can and do hire the best lawyers. They can and do hide evidence. In practical terms, you will need information from an insider and discovery of the facts will be thwarted at every turn.
You can, as one my members discovered, end up threatened with the removal of permissions to trade and finally when you get the case near a court find the regulator demand a down payment of their fees before the commencement of the case.
Given that the regulator or FOS could have already bankrupted your business; this whole avenue is technically an option, but a highly impractical one.
The other available is a complaint to the FCA Complaints Commissioner. This has been done and we are extremely fortunate in having Anthony Townsend as the Commissioner. He has proved to be a valiant defender of the oppressed but is hampered by his remit.
Whilst he can recommend, he cannot demand and nor can he decide or stipulate the type or level of compensation that is necessary. This restricts Anthony Townsend to being the “Canary in the Mine”. It does not require a huge level of paranoia to suspect that the regulator will be seeking a less curious and less thorough Commissioner when the role is renewed. Currently there is no cap on the compensation available.
But suddenly in the midst of the COVID crisis, some may say because of cover created by it, the FCA develops a burning desire to create a scheme which and I quote “which is more user friendly, using plain language to make it more accessible.“ Yeah right! The real reason is to ensure that this route to compensation is emasculated and later I will explain why.
So, let’s have a word about the Consultative process. The FCA and its siblings FOS and FSCS are forced by legislation to “consult” so they put out a number of CP’s – 11 so far this year. They explain what they seek to do and then ask, often loaded questions, conveniently away from anything they want to do that is controversial.
If you only answer the questions asked, you let through the controversial stuff and they can say they have consulted on it. We always answer questions they should have asked – must drive them nuts!
The whole CP process is potentially a waste of time as whilst they have to consult, they do not have to take any notice of the replies or pick up on any of the answers given.
This consultation exercise has been issued without any public relations support, during the summer holidays, a parliamentary recess and during a pandemic. It represents an attempt materially to reduce the scope of the Scheme such that it is in effect a new Scheme; the Regulators should therefore be compliant with the obligation to maximise public attention. It begs the question why?
This consultation has emerged before the finalisation of the delayed reviews into Connaught and London Capital and Finance.
As you may remember, Connaught is close to our hearts. Here the regulator totally failed to investigate a regulated firm which they knew was fraudulent.
Initially, we believed that it was the Connaught’s newly employed US CEO that had alerted the FSA to the fraud. We now believe that they already knew.
As a result, instead of being grateful for the suitcase full of information, they attempted to liable him using their media machine. This made him all but unemployable and in any other world he would have a claim against them in millions.
Anthony Townsend supported him and demanded that the FCA apologised and compensated. They sent a grudging apology but refused to promote it, leaving the stain on his character intact.
In an attempt to cover their incompetence, FCA conspired with FOS to dump the blame on advisers and as a result of this a number of advisory firms failed and their directors and shareholders have claims in many thousands if not millions.
Unless there is a last-minute fudge, I suspect Connaught and London Capital and Finance reviews are going to be bad news for the Empire and this consultation seeks to mitigate those claims and no doubt others.
We note we are not alone in our criticism. The True and Fair Campaign, The Transparency Task Force, Connaught Action Group and the FCA’s own current Complaints Commissioner Anthony Townsend have similar views.
Currently, the levels of compensation are unlimited. So, if this CP is brought into force what can those with claims expect to get? The FCA is suggesting 3 bands from £250 to £1,000 for Distress and Inconvenience. Not much use or a £1m claim.
So, the Regulator and its siblings can cause millions of pounds of damage, destroy someone’s life, and avoid any significant retribution. They can even keep their bonuses.
The Impartial Financial Advisers Association is putting its response in consultation with other interested parties.
So how does all this bring us back to the Winslow Boy? Remember Ronnie Winslow was convicted without proper process and when Justice as eventually done, it was too late to make any difference.
The CEO in the Connaught case has been waiting for resolution for a decade already. He is the new Winslow Boy, him along with over 10 others.
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