A former BlackRock (BLK.N) investment manager has become only the second person to be banned for personal dishonesty by Britain’s financial watchdog after he was caught dodging fares worth 43,000 pounds on his daily commute into London.
When the story broke in April, British newspapers quoted commuters angry that an anonymous hedge fund manager dubbed the “biggest fare dodger in history” was allowed to settle quietly with the railway company without being prosecuted.
The story led to an investigation by the Financial Conduct Authority and Jonathan Paul Burrows, a senior figure at the world’s largest investment manager, was later unmasked by a newspaper.
The FCA’s action against Burrows is a sign of how personal integrity is now seen as crucial as the financial sector seeks to restore its reputation after its worst crisis in decades, lawyers said.
Burrows was a managing director at BlackRock Asset Management Investor Services and on Nov. 19, 2013, he was stopped by ticket inspectors at the exit gates of London’s Cannon Street station, the FCA said on Monday.
Burrows was found to have failed to buy a valid ticket for his entire journey from Stonegate, East Sussex, the FCA said. The financial high-flyer admitted to evading fares on a number of occasions.
the FCA’s director of enforcement, Tracey McDermott SAID
- “Burrows held a senior position within the financial services industry. His conduct fell short of the standards we expect,”
- “Approved persons must act with honesty and integrity at all times and, where they do not, we will take action.”
Burrows said he had always recognised that what he did was foolish.
In March 2014 he paid a sum of money to Southeastern Trains that was significantly more than the value of the fares he had evaded, and British Transport Police will not be pursuing a case against him, Burrows added.
Southeastern Trains calculated that Burrows dodged 43,000 pounds in fares, probably over five years.
- “While I respect the FCA’s decision today, I also regret it, coming as it did after a 20-year career in the City that was without blemish,” Burrows said.
- “I recognise that the FCA has on its plate more profound wrong-doing than mine in the financial services sector, and I am sorry that my case has taken up its time at this critical juncture for the future of the City and its reputation,” Burrows added.
BlackRock said Burrows left the company earlier this year and that what he admitted to is contrary to its values and principles.
Jacqui Hatfield, a financial services lawyer at ReedSmith, said the ban seemed to be harking back to the days when personal honour was the main quality for working in the City of London, where the stock exchange’s motto is “my word is my bond”.
The FCA said that Burrows had on a number of occasions paid only 7.20 pounds, a third of the fare due, and had not told his employer.
- “Although the FCA is not penalising Burrows for not informing his employer, the FCA has taken this into account, amongst other things, in deciding what action to take,” the FCA said.
Most bans by the FCA are for life, but Burrows’ ban is only the second one for a lack of personal integrity not directly related to the job he is authorised for by the watchdog.
In January, Anthony Verrier was banned for poaching staff from brokers Tullett Prebon when he joined rival BGC Partners. The High Court found that Verrier “departed” from the truth when the truth was “inconvenient”.
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