Stephen Joseph Burdett & Anor v The Financial Conduct Authority

Publication of an FCA decision notice is presumed under Financial Services and Markets Act 2000. An applicant must provide cogent evidence that publication is significantly likely to destroy or severely damage their livelihood; reputational harm, embarrassment and disagreement with the FCA’s allegations are insufficient.

In an FSMA reference, the Tribunal’s jurisdiction is confined to the matter referred. An unarticulated alternative allegation is outside that matter where it concerns a different regulatory provision and is not of the same nature as the allegation in the warning notice, even if it arises from the same facts.

The FCA issued decision notices imposing prohibition orders and financial penalties on Mr Burdett and Mr Goodchild. It alleged that they lacked integrity in connection with arrangements under which clients advised by Synergy Wealth Limited invested through Westbury Private Clients LLP in portfolios containing high-risk TRG investments.

At a preliminary hearing, each applicant sought privacy directions. The FCA sought to amend its statements of case to add, in the alternative, allegations of failure to exercise due skill, care and diligence. It also sought a joint hearing of the two references.

The central issue was whether the proposed alternative allegations formed part of the FSMA “matter referred” to the Tribunal.

1. The privacy applications were refused. The starting point was open justice and the statutory presumption that decision notices should be published. The applicants gave no cogent evidence that publication, as distinct from the FCA’s regulatory action already taken, was significantly likely to destroy or severely damage their livelihoods. Their concerns about reputation, future employment and the provisional allegations could be addressed at the substantive hearing.

2. The references were directed to be case managed and heard together. They arose from a common factual continuum concerning the allocation of Synergy clients to Westbury portfolios and the suitability of TRG investments. A joint hearing would permit a fully informed assessment of the common factual matrix and avoid inconsistent findings, without preventing separate determination of the allegations against each applicant.

3. Permission to add the alternative negligence allegations was refused for want of jurisdiction. Following Bluecrest Capital Management (UK) LLP v FCA [2023] UKUT 00140 (TCC), an allegation omitted from a warning notice is within the matter referred only if it is based on the same factual background and is of the same nature as the articulated allegation. Lack of integrity based on conscious recklessness and failure to exercise due skill, care and diligence differ materially in the degree and nature of culpability. The latter allegation concerned a different Principle and was not merely a lesser form of the former.

4. The Tribunal would, if jurisdiction existed, have allowed the amendments under rule 5(3)(c): they had real prospects, were sufficiently clear, caused no procedural prejudice, and arose from facts already pleaded. That conclusion did not cure the jurisdictional defect. The FCA could renew its application if the Court of Appeal’s decision in Bluecrest made that appropriate.

5. Other amendments were permitted. They reflected later evidence, withdrew or narrowed aspects of the FCA’s case, and caused no prejudice. Further case-management directions were made.

not stated in the judgment.