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Insight: FCA non-financial misconduct bans highlight the need for continuous employee screening

In November the Financial Conduct Authority (FCA) distributed a press release detailing bans for three financial services industry employees, following findings that they did not meet Fitness and Propriety (F&P) standards. The three professionals in question were convicted of serious non-financial indictable offences whilst working in the financial services industry.

The three individuals were found to have committed a diverse range of serious offences.
Russell David Jameson, an approved person at an authorised firm was approved by the FCA in various customer-facing functions and held significant influence, was convicted of serious criminal offences involving the making, possession and distribution of indecent images of children. These offences took place between January 2013 and August 2017, whilst Jameson held his professional position within the industry.

Mark Horsey, a sole director and shareholder of an authorised financial advice firm with permission to conduct designated investment business and insurance distribution was convicted of voyeurism – contrary to the Sexual Offenses Act 2003.
In April 2018, Frank Cochran, a director and shareholder of an authorised financial advice firm, was convicted of sexual assault, engaging in controlling and coercive behaviour and an offence contrary to the Protection from Harassment Act 1997.
The FCA has previously made it clear that “non-financial misconduct is misconduct, plain and simple.” – We are seeing an increase of individual investigations of those within the financial services industry.

Commenting on the FCA’s decision to ban these individuals from working within the sector Mark Steward, Executive Director of Enforcement and Market Oversight, commented: ‘The FCA expects high standards of character, probity and fitness and properness from those who operate in the financial services industry and will take action to ensure these standards are maintained.’

News stories such as these highlight the imperative importance for annual employee criminal record checks, in order to ensure that employees are up to F&P standards. On a day-to-day working basis, it is up to firms to make decisions in regard to the fitness and propriety of employees and despite a professional being employed within an industry, behavioural checks can still be completed. As within many industries, credible firms in Financial Services require employees to undergo a criminal record check before gaining employment in certain posts. Continuous checks encourage a culture where staff take responsibility for their actions and do not commit misconduct in or outside of the workplace.

In the UK, Disclosure and Barring Service (DBS) checks are used to confirm whether a candidate has any records of convictions, cautions, reprimands or final warnings. What’s included in a criminal record background check will depend on which of the three types of DBS check is run (basic, standard or enhanced). Find out more about this service, here.

in News, Pre Employment Screening, Regulation by