CBI Publishes A Prohibition Notice For The First Time

Author:Ms Muireann Reedy
Profession:Dillon Eustace
 
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The Central Bank of Ireland (the "CBI") has recently published a Prohibition Notice in relation to an individual who was formerly a partner in a firm which was authorised under the Investment Intermediaries Act 1995 and under the European Communities (Insurance Mediation) Regulations 2005 (the "Individual"). The Prohibition Notice prohibits the Individual from performing any controlled function in any regulated financial service provider indefinitely.

This is the sixth Prohibition Notice to be issued by the CBI. Notably, it is the first time that the CBI has exercised its discretion to publish a Prohibition Notice (albeit with some redactions). Up to now, the CBI has only published brief statements on its website giving high level details of Prohibition Notices it has issued.

Background

The Prohibition Notice related to the fact that the Individual had misappropriated funds from a client. The Prohibition Notice was issued after the Individual signed a Statement of Undisputed Facts, concerning the matters set out below.

A client had given the Individual two cheques in the amounts of €2,961 and €28,750 to forward to J&E Davy, trading as Davy, for the purposes of paying this money into the client's personal pension and his spouse's pension. On the instruction of the Individual, the client had left the cheque for €28,750 blank. The Individual altered the name on the cheque for €2,961 so that the Individual was the payee rather than Davy and inserted his own name on the blank cheque. The Individual then lodged both cheques to his personal account.

The CBI commenced a fitness and probity investigation under section 25 of the Central Bank Reform Act 2010 (the "2010 Act"), after becoming aware of an allegation that the Individual had misappropriated funds from a client, via its whistle-blower desk.

Fitness and Probity Investigations

The CBI can commence a fitness and probity investigation where it has reason to suspect a person's fitness and probity to perform the relevant controlled function and in the circumstances an investigation is warranted into the person's fitness and probity.

The CBI is not required to carry out an investigation into a person's fitness and probity if there are "undisputed facts" that in the reasonable opinion of the CBI make it unnecessary to carry out an investigation and the relevant person and any regulated financial service provider concerned have been afforded a reasonable opportunity to make submissions on the...

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