Enforcement Actions

The UK's Financial Services Authority has fined Royal Bank of Scotland Group GBP5.6 million for failings in the bank's sanctions controls. The group, largely in public ownership, qualified for a 30% reduction in penalty because it agreed to settle the case early.

A former executive director of the Queensland Retail Traders and Shopkeepers Association (QRTSA) has been committed to stand trial for alleged victimisation against a responsible officer of a corporate trustee, in an action commenced by the Australian Prudential Regulation Authority.

The USA'sSecurities and Exchange Commission yesterday charged Manhattan-based financial adviser Kenneth Ira Starr with fraud and is seeking an emergency court order to freeze his assets after he stole client money for his personal use, including the purchase last month of a multi-million dollar apartment where he and his wife live.

Barry John Patrick of Frankston, Victoria has been charged on three counts with carrying on a financial services business and one count of providing financial advice without holding an Australian Financial Services Licence (AFSL), following an investigation by ASIC. Karl Heinz Veljkovic of Beaconsfield, Victoria has been charged on one count with carrying on a financial service business without holding an AFSL.

The Financial Services Authority has at last been able to put to bed the long running saga of Sameer Patel and Robin Chhabra who have been fined GBP180,541 and GBP95,000 respectively for market abuse. Both men have been from working in the financial services industry.

The USA's Securities and Exchange Commission, SEC, has charged Quadrangle Group LLC and Quadrangle GP Investors II LP, alleging "a widespread kickback scheme to obtain investments from New York's largest pension fund."

John A. Foley, formerly an "employee benefits specialist" with accounting firm Deloitte, is one of four people who have settled proceedings brought by the USA's SEC alleging insider trading in Crocs, Inc., YRC Worldwide, Inc., Spectralink Corporation and SigmaTel, Inc. and in doing so "caused his firm to commit" offences. The case also demonstrates that some people get involved in schemes for remarkably small financial benefit.

The UK's Financial Services Authority has fined a fund manager and banned him from the industry following discovery that he cut information from one document and pasted it in others to create a false picture of the health of proposed investments.

GBP2.45 million - by UK standards a large fine - has been handed to Standard Life because its internal systems and controls failures " resulted in the production of misleading marketing material for its Pension Sterling Fund." The FSA says it's a big fine and it presages a hardening of the FSA's attitude.

Mark Richard McKenzie from Melbourne and Colin Hebbard from Perth, both formerly employed by Citigroup, have been banned from providing financial services for three and five years respectively.