Such arguments against naming the firm in a warning notice statement include whether, for example, naming the firm may prejudice other proceedings, or affect the person's health, push them into bankruptcy or deprive them of income.
The firm in question can also decide whether to accept the finding, or dispute it, and the matter will then go to the regulatory decisions committee, to which they can make representations.
Under the new arrangements, in section 4, which replaces this section – additionally, the whole enforcement guide is being replaced – the FCA plans to publish names at the outset, using a "public interest framework".
The consultation paper says: "We will decide whether and what to publish on a case-by-case basis, using a new public interest framework and taking all relevant facts and circumstances into account."
'Public interest' factors are described as:
- protecting consumers;
- encouraging whistleblowers;
- addressing public concern or speculation;
- providing reassurance that it is taking action; and
- deterring future breaches.
And as mentioned above, it says it will consider "compelling legal or other reasons" when making that decision. If making a public statement would have an impact on the stability of the financial system, for example, then it would not be considered to be in the public interest.
It goes onto say that if there is no case to answer, then it will at a later date make an announcement telling the public that there is nothing wrong after all.
In a recent webinar hosted by City law firm Simmons & Simmons, Chambers said that if the framework were to be applied today, then two-thirds of their investigations over the past nine months would be made public under this new approach.
Many are extremely worried by this, and particularly about the viability of small and medium-sized financial services businesses under the new regime.
Lawyers expect the FCA in its announcements to say that it is investigating a particular firm with a broad focus of what the complaint is, for example money laundering.
This, many would think, would be enough to drive many small firms out of business, and seriously dent the share price of larger, publicly quoted firms, due to the reputational hit for being associated with such dubious activity, even if the FCA later came out and said that there was nothing to substantiate an initial complaint.
Ashurst's Willmott says: "I think the biggest impact would be for firms where clients have their assets with them and they would get worried about the safety of those assets."
