Former Chief Executive of bank fined for failing to take “reasonable steps”

This is only the third enforcement action concluded successfully by the UK Financial Conduct Authority or the PRA against a senior manager for breaching the Individual or Senior Manager Conduct Rules since the senior managers regime came into force in March 2016. It is the second enforcement action to tackle the issue of "reasonable steps" for the purposes of the Senior Manager Conduct Rules.

This case is perhaps unusual as the individual, Mr Hunter, performed some or all of the responsibilities of the CEO, CRO and CFO roles at various points during the relevant period, as opposed to different individuals performing those responsibilities throughout the relevant period. However, the way in which the PRA delineated its expectations of, and findings about, Mr Hunter's performance of these responsibilities demonstrates how in certain cases, especially those involving issues relating to systems and controls, responsibility for those issues is unlikely to rest with a single senior manager.

To determine whether Mr Hunter performed his CEO, CRO and CFO responsibilities to the standard to be expected of a person in his position and with his responsibilities and knowledge, the PRA considered:

• Mr Hunter's skills and experience, including that he was an "experienced financial services professional who had recently held CRO and CEO roles in another bank" and his familiarity with the systems and controls within Wyelands' Risk function.
• Mr Hunter's personal knowledge of and involvement in the relevant transactions, as he was personally and closely involved in the negotiation and operation of the them.

As part of the settlement reached, Mr Hunter undertook not to apply for or perform any function relating to any regulated activity.

We consider the PRA’s findings, and the implications for banks and Senior Managers working within them, in this decision insight, which first appeared in the February 2024 financial services investigations and enforcement column published by Practical Law: https://uk.practicallaw.thomsonreuters.com/w-042-0728.