The FCA has decided to fine Carlos Fuenmayor, chief executive of BancTrust, £99,600 for failing to disclose three separate matters to the regulator.
The FCA's Senior Managers and Certification Regime is intended to reduce consumer harm and strengthen market integrity by creating a framework through which firms and regulators can hold individuals to account. The FCA concluded that Mr Fuenmayor's omissions were negligent and that he had breached APER Statement of Principle 4 and Senior Manager Conduct Rule 4, which requires individuals to disclose appropriately any information the FCA would reasonably expect notice of.
Until December 2021, Mr Fuenmayor failed to tell the FCA, including in application forms he submitted on BancTrust's behalf, that he had been placed under investigation by the US Financial Industry Regulatory Authority in December 2017 and was subsequently sanctioned by it in June 2019.
He also failed to disclose that, shortly before an inspection in November 2019, the National Financial Intelligence Unit of Venezuela had frozen his local currency bank accounts, together with those of his Venezuelan companies and their directors. The FCA first became aware of this issue in January 2023 through a website article in Spanish. It took two rounds of correspondence between the FCA and BancTrust for the relevant information to be disclosed in March 2023.
These omissions meant the FCA did not have the opportunity to fully assess Mr Fuenmayor's fitness and propriety or seek further information.
The FCA considered that Mr Fuenmayor's disclosure failings were negligent, and that he did not lack fitness and propriety. On a scale of 1 to 5, the FCA assessed Mr Fuenmayor's breaches to be at seriousness level 2 resulting in a fine of 10% of relevant income for the relevant period. There were no mitigating or aggravating factors, and no adjustment for deterrence was considered necessary. As Mr Fuenmayor did not decide to settle at stage 1 there was also no settlement discount.
Mr Fuenmayor has referred the Decision Notice to the Upper Tribunal, where he and the FCA will present their cases. Any findings in the Decision Notice are therefore provisional and reflect the FCA's view of what occurred and how his conduct should be characterised.
The case is a reminder that the FCA expects senior individuals to take a broad and proactive approach to disclosure, particularly where overseas investigations, sanctions or asset freezes may be relevant to fitness and propriety. For UK financial services lawyers and compliance teams, it underlines the importance of careful governance around regulatory notifications and of testing whether potentially adverse matters should be raised with the FCA at an early stage.
