The Upper Tribunal of the British financial regulatory regime has imposed fines on the men behind Catalyst Investments and has banned one of the pair from the financial industry.

Compliance Matters has already covered the Catalyst saga in detail by analysing the £20,000 fine levied in late 2013 on Alison Moran, the firm's compliance officer. This month, the tribunal issued a judgment that imposed fines on the two men who led Catalyst Investment Group, which distributed bonds in circumstances that the FCA thought were misleading. The men's names are Timothy Roberts and Andrew Wilkins.

The tribunal imposed a fine of £450,000 ($628,597) on Roberts and banned him from performing any role in regulated financial services; it also fined Wilkins £50,000. It referred back to the FCA a decision on whether to impose a prohibition on Wilkins. It remains open to the parties to appeal the tribunal’s judgement.

In August 2013 the FCA fined Roberts £450,000 and prohibited him fully from finance and fined Wilkins £100,000 and prohibited him from undertaking significant influence functions. The men referred the FCA’s decisions to the Tribunal, leading to its judgement.

Catalyst was the primary distributor of ARM bonds (structured products issued by a Luxembourg entity, ARM) in the UK between 2007 and 2009. The underlying assets of such bonds were senior life settlements purchased in the United States. Catalyst promoted and distributed ARM bonds to investment intermediaries and independent financial advisers in the UK, who in turn promoted and sold them to private investors. The compliance officer turned a blind eye to licensing problems.

Roberts was a director and chief executive of Catalyst, the UK distributor of bonds issued by ARM Asset Backed Securities, of which Roberts was also a director. Wilkins was a director of Catalyst until 23 March 2010, and was involved in compliance issues, especially in relation to financial promotions.

ARM was a securitisation vehicle based in Luxembourg. It issued bonds and used the proceeds to invest in traded life assurance policies (also known as senior life settlement policies). ARM’s bond programme was registered with the Irish Stock Exchange and traded on its regulated market.