Be very afraid of the ‘fright factor’

The FSA’s determination to hold individual senior executives – such as former UBS Wealth Management UK CEO John Pottage – responsible for compliance failures under their watch will have negative consequences, Tom Custance and Deepak Arora contend.

Tom Custance (tcustance@foxwilliams.com) is a partner and Deepak Arora (darora@foxwilliams.com) an associate within the financial services sector group at law firm Fox Williams.

John Pottage was the first individual to be subject to a financial penalty by the FSA for failing properly to oversee and control the conduct of others. The penalty the FSA sought to impose was £100,000 for inadequate supervision and failing to undertake a “systematic overhaul” in respect of “serious flaws” in the governance and risk management framework at the UBS division.