Public statement concerning prohibitions under Section 10A of the Financial Services Act 2008

Mr Richard Maurice Dixon (Mr Dixon), Date of birth: 9 March 1958

Mr Brian Charles James Monk (Mr Monk), Date of birth: 10 April 1953

1.    Action

1.1 The Financial Services Authority (“the Authority”) makes this public statement in accordance with powers conferred upon it under section 13 of the Financial Services Act 2008 (“the Act”).           

1.2 This action supports the Authority’s statutory objectives of reducing financial crime and maintaining confidence in the Island’s financial services industry.          

1.3 Following an investigation into the fitness and propriety of Mr Dixon and Mr Monk, the Authority has deemed it necessary, and proportionate in all the circumstances, that Mr Dixon and Mr Monks both be prohibited under section 10A of the Act.       

1.4 Mr Dixon and Mr Monk are therefore both prohibited from acting as a Director, Isle of Man Resident Officer, Money Laundering Reporting Officer, Deputy Money Laundering Reporting Officer or Compliance Officer of any company carrying on regulated activity as defined in section 3 of the Act.         

1.5 The prohibitions shall remain in force until such time as either or both of Mr Dixon and Mr Monk successfully applies to the Authority pursuant to section 10C of the Act for a variance or revocation of their prohibition.      

1.6 In accordance with section 10A(5) of the Act, an individual commits an offence if he or she performs, or agrees to perform, a function which he or she is prohibited from performing.

1.7 In accordance with section 10A(6) of the Act, a permitted person; as defined in section 35(1) of the Act, commits an offence if without reasonable excuse the permitted person permits an individual to perform a function which the individual has been prohibited from performing.

2.   Background

2.1 Mr Dixon and Mr Monk were previously employed as executive directors at a trust and corporate service provider licensed by the Authority, OCRA (Isle of Man) Limited (“OCRA”). Such positions bore responsibility for ensuring the good governance of that licenceholder and its compliance with the regulatory framework.         

2.2 The Authority, at an initial inspection, identified material regulatory breaches in respect of a failure to adequately document whether or not OCRA had fully complied with its statutory obligations in respect of AML/CFT legislation. Having brought such failings to the attention of OCRA, the Authority afforded OCRA a suitable period of time in which to remediate its failings. OCRA subsequently confirmed to the Authority that it had completed its remediation.            

2.3 During its next inspection of OCRA the Authority’s officers identified –

2.3.1 that the remediation of its past regulatory failings undertaken by OCRA was incomplete and not of an acceptable standard, and

2.3.2 that further material breaches of OCRA’s regulatory obligations had occurred.

2.4 As a result of the material nature of the matters identified the Authority conducted an investigation of OCRA and its key staff using its powers under Schedule 2 of the Financial Services Act.          

2.5 This investigation identified concerns that Mr Dixon and Mr Monk may not have undertaken their duties in a fit and proper manner. In accordance with the Authority’s framework for dealing with such matters, both Mr Dixon and Mr Monk were afforded the opportunity to make representations to the Authority. Upon considering all the information before it the Authority concluded that both Mr Monk and Mr Dixon were not fit and proper and that issuing a prohibition was warranted.

2.6 In accordance with section 32 of the Financial Services Act 2008 a person issued with a prohibition has a right of appeal to the Financial Services Tribunal. Any prohibition only becomes effective upon the determination of that appeal process. Both Mr Dixon and Mr Monk lodged appeals with the Financial Services Tribunal.     

2.7 On 19 April 2017 Mr Dixon withdrew his appeal and his prohibition became effective from that date. Details of this prohibition appear on the Authority’s website.        

2.8 Mr Monk’s appeal was heard by the Financial Services Tribunal on 23 June 2017 and the Authority was notified on 20 September 2017 that the Tribunal had dismissed Mr Monk’s appeal. Mr Monk’s prohibition became effective on 7 November 2017.

2.9 Details of these prohibitions can be viewed on the Authority’s website.    

2.10 OCRA surrendered its licence on 31 July 2017.

 3. Statement

3.1 The prohibitions issued to Mr Dixon and Mr Monk are the first occasions that the Authority has utilised its powers under section 10A of the Financial Services Act. In doing so the Authority believes that its decision to prohibit these individuals assist the Authority in achieving its statutory objectives.

3.2 When undertaking business in the regulated sector, compliance with the regulatory framework is mandatory. Not applying sufficient or appropriate resources, or adopting an indifferent approach to compliance, places non-compliant businesses at an advantage to those who seek to comply. Such an approach will place those involved at enhanced risk of regulatory intervention.

3.3 Individuals who accept positions of responsibility in the regulated sector need to be fully aware that the job of the regulator is to take appropriate action where behaviour or actions that are not fit and proper are identified.

David Griffin              

Head of Enforcement Division