| Link(s): | FCA bans and fines Floris Jakobus Huisamen over London Capital & Finance plc financial promotions | FCA |
Context
In October 2023, the FCA censured London Capital & Finance plc (LCF) over their financial promotions. The FCA has now fined Floris Jakobus Huisamen (a former director of LCF) £31,800 and banned him from working in financial services. Mr Huisamen was responsible for compliance at LCF but recklessly signed off hundreds of financial promotions, which contributed to thousands of investors being misled.
Key points to note and next actions
LCF marketed minibonds to retail investors. Financial promotions, signed off by Mr Huisamen, presented a misleading picture of the minibonds, making them appear a far more attractive investment than they were. Investors were not given the full picture about the risks of the product, including the presence of hidden charges and the unsustainable nature of the lending being carried out by LCF.
Mr Huisamen signed off these financial promotions despite his own concerns about LCF’s strategy. He failed to provide proper scrutiny or sufficiently challenge senior management. In particular, he failed to obtain evidence of the claims being made, allowed promotions that gave a misleading impression that the minibonds were regulated by the FCA and continued to approve promotions even when he became aware of inaccurate claims.
Therese Chambers, the FCA Joint Executive Director, Enforcement and Market Oversight, said: “Mr Huisamen should have ensured LCF’s financial promotions were ‘fair, clear, and not misleading’. However, under him, the approval process became an ineffective tick-box exercise – as a result, thousands of investors were persuaded to invest on the basis of highly misleading statements.”
Firms are reminded that they are responsible for ensuring that Financial Promotions are fair clear and not misleading and do not result in poor outcomes for customers. They should ensure that robust processes are in place for the review and approval of Financial Promotions.