The 1^st qtr. of 2015 has been a busy period for JFSC regulatory action and it looks like it’s not over yet.

The JFSC issued four public statements in the first quarter of 2015 in relation to a scam, a local business and 2 employees:

• New World Trustees (Jersey) Limited – march 2015
• blackpearl-asia.com – feb 2015
• Mr James Nicholls (R) – jan 2015
• Mr Stephen Lee Ross (R) – jan
• http://www.jerseyfsc.org/the_commission/general_information/public_statements/public_statements.asp

Mr Stephen Lee Ross reveals an interesting new trend.

1. Making a relatively novel step into the data security arena, the JFSC has prohibited an individual [Stephen Lee Ross [SR]] from any further employment in the regulated industry, following his conviction and £1,000 fine for breach of data protection legislation.
2. Data protection prosecutions have been rare in Jersey, but this action creates a new trend, exposing employees who misuse client data to both criminal and/or regulatory sanctions, where previously liability had, in practice, tended to be confined to civil action by the employer.

Mr James Nicholls

1. Whilst the JFSC has often used its directions power to prohibit individuals from any further employment in the regulated industry, one recent public statement also reveals that the JFSC has modified this approach by permitting ongoing employment subject to some fairly onerous restrictions, preventing the individual concerned from fulfilling certain responsible positions and requiring close supervision.

New World Trustees (Jersey) Limited

1. The latest public statement in March related to the administration of a Regulated entity that had a number of general failings and
   1. conducted unauthorised investment business,
   2. breached the Control of Borrowing (COBO) legislation.
2. These are both criminal offences on the part of the client entity, but it has been rare historically that public interest justifies prosecution for such breaches, at least in relation to COBO.
3. These breaches should nevertheless be considered of critical importance from the perspective of any trust company because, as this public statement demonstrates, they may be sanctioned by the regulator for permitting such breaches, regardless of any prosecution.

General enforcement matters

1. On a different matter, court proceedings to challenge the issue of public statements are continuing and a flurry of judgments have been issued on interlocutory matters, primarily relating to discovery of documents.
2. The Court continues to seek to maintain a balance between the interests of preserving confidentiality, whilst ensuring that an appellant has the information necessary to assess and challenge the making of a public statement through an appeal. For example:
   1. Case: U V and W v JFSC 23 Oct 2014
   2. This case related to an appeal against JFSC public statements, seeking further disclosure of the Board of Commissioners’ reasons for their decision, which it was claimed had been inadequate for failure to explain why the Appellants’ arguments were rejected.
   3. The Court concluded that the Appellants should be in the same position as the Board was in making its decision.
   4. Disclosure was therefore ordered of minutes of each stage of the Board’s decision-making process and their deliberations, the Individual Complaint Paper for each appellant and other persons where public statements have been made, and the final statement to be issued.

The future and fining

All these matters will shortly have an added financial dimension with the introduction of civil penalties.