22 July 2015 - Post by:
The FCA is always quick to point out that, unlike the courts, it is not bound by its previous decisions and its Final Notices have ‘no precedent value’. But does this mean that the FCA is not obliged to pay any regard to treating like cases alike? No, it certainly does not.
Over the past few years there have been several cases where enforcement action has been taken against an individual, only for the FCA to make less serious findings about and impose less serious sanctions on another individual in connection with what seems to be similar conduct in relation to the same matter.
One such case involved Tariq Carrimjee, a fund manager who was accused of acting without integrity by recklessly assisting one of his clients to commit market abuse. He referred the FCA’s findings against him to the Upper Tribunal, partly on the basis that he claimed that the FCA had made less serious findings about another individual who had been found to have engaged in similar conduct in relation to the same matter – this other individual had been found by the FCA to have acted without due skill, care and diligence, arguably a less severe finding than the one Mr Carrimjee faced (that he had acted without integrity).
Mr Carrimjee argued that the FCA has a public law duty to act rationally, meaning that it should treat like cases alike and apply the same disciplinary approach consistently to all whom it regulates. He also submitted that the FCA could not advance a case against him before the Upper Tribunal that directly conflicted with the findings it had made in respect of another individual in relation to the same matter as this position was untenable as a matter of evidence.
Unfortunately, the Upper Tribunal side-stepped expressing a view as to whether there is an overarching principle that the FCA is bound to treat like cases alike. Nonetheless, the Upper Tribunal was clearly persuaded by Mr Carrimjee’s arguments that the FCA was attempting to advance a case against him which was not only inconsistent with but directly conflicted with the case it had already brought against another individual in connection with similar conduct in relation to the same matter. The Upper Tribunal concluded that Mr Carrimjee had failed to act with due skill, care and diligence (which was consistent with the finding that had been reached by the FCA in respect of the other individual).
As a result, there is some force to the proposition that the FCA should take a consistent approach towards similar cases which rely on broadly the same evidence. In situations where there are multiple parties being investigated for similar conduct in relation to the same matter, each party may not know what, if any, action the FCA is proposing to take against the others. However, this should not stop those involved from reminding the FCA of its public duty to act rationally and be consistent in its approach to taking enforcement action.
For our more detailed analysis of the Upper Tribunal’s decision in Tariq Carrimjee v the Financial Conduct Authority  UKUT 0079 (TCC), please click here.