The Securities and Futures Authority has expelled two members for negligence and a lack of integrity...
The Securities and Futures Authority has expelled two members for negligence and a lack of integrity when handling obligations taken on by a client.
Kevin Fane-Harvey and Terence Everson, senior managers of International Futures Corporation, have both been required to pay £7,500 towards the regulatory body's costs.
Fane-Harvey has been expelled from the SFA Register of Senior Executives and the SFA Register of Finance Officers and suspended from the SFA Register of Directors. Everson has expelled from the SFA Register of Directors and suspended from the SFA Register of Representatives. The suspensions are for 21 months and back dated to 1 January 1999.
SFA issued an Intervention Order against IFC on 12 January 1999. This followed IFC's failure to obtain enough money from a client to lodge as "margin" payments against positions taken by the client in options on Eurex.
The inability to meet these margin calls mean IFC was placed into liquidation.
The SFA reports that IFC had not carried out proper enquiries into its client or obtained sufficient evidence of its financial standing, despite having agreed to allow the client to trade on credit.
"In addition, although the client failed to meet the margin calls or other collateral requirements, IFC continued to accept the clients trade on options on Eurex", the SFA says.
Surplus money held in other client's accounts at IFC was used to meet the margin payments caused by the clients trading. Compounding this problem, IFC's calculation of its client money position was inaccurate. Despite an obligation to report to SFA any deficit in the client money account, IFC failed to do so.
Both Fane-Harvey and Everson admit to failing to act with integrity and due skill, care and diligence, at various stages of the process.
£1bn business since inception
Considered doing so in 2015
Client communication considerations
Aviva: ‘We are sorry’
FOI from Professional Adviser