The UK's Financial Conduct Authority has banned Simon Varley from working in financial services for knowingly performing a controlled (regulatable) function without its approval and for providing investment advice to retail customers when he knew that he was not qualified to do so.
The FCA also found that Varley failed to act with integrity as a director (Controlled Function 1) and as a compliance overseer (CF10) and was therefore not fit (or 'proper' enough) to be in financial services.
The FCA says that he lied deliberately about his position and his misconduct continued for years, but it fails to mention any resulting losses to customers. He also abused his position of trust as a director, which proved to the FCA that he lacked both honesty and integrity. The regulator has been keen to make an example of him.
Varley worked at Dickinsons Financial Management Ltd, a small financial advisory firm where he performed a "customer advisor function" (CF30) until January 2013. During the Retail Distribution Review, the FCA introduced rules that required advisors to be qualified if they wanted to be approved for CF30 status. Although his CF30 approval was removed in January 2013 by the FCA at his request, Varley still continued to advise retail customers between January 2013 and September 2017.
Varley repeatedly misled his fellow directors at board meetings about sitting and passing the relevant exams required for him to continue advising, and claimed falsely that he had applied to the FCA for approval as a CF30 but that the FCA had not updated the Financial Services Register. In fact, no application was ever made. Varley also reportedly lied to Dickinsons’ PII (professional indemnity insurance) providers about his qualifications.
As part of his CF10 function, Mr Varley was required to provide regulatory information to the FCA in Dickinsons’ Retail Mediation Activities Returns. In discharging this responsibility, he knowingly misled the FCA into believing that only one person at Dickinsons was providing retail investment advice to customers instead of two. He told other untruths as well. Without any explanation, the FCA is claiming that Varley’s actions led to Dickinsons going into voluntary liquidation and being dissolved.