FCA Fines and Bans Former Director of London Capital & Finance

The FCA has fined former director of LCF, Floris Jakobus Huisamen, ￡31,800 and banned him from working in financial services.

Huisamen was responsible for compliance at LCF but recklessly signed off hundreds of financial promotions, thus contributing to thousands of investors being misled. The regulator had previously taken action over the financial promotions of London Capital & Finance plc (LCF) in October 2023.

LCF had marketed minibonds to retail investors, but the financial promotions approved by Mr Huisamen presented a misleading and inaccurate view of the investment opportunity. The marketing materials made the minibonds appear more attractive than they actually were, and investors were not given a fair representation of the the risks associated with the product. For instance, they were not made aware of the hidden charges and the unsustainable nature of lending carried out by LCF.

Mr Huisamen signed off on these financial promotions despite his own concerns about LCF’s strategy and failed to properly scrutinise or sufficiently challenge senior management. Specifically,, he failed to obtain evidence of the claims being made, allowed promotions that gave a misleading impression that the minibonds were regulated by the FCA, and continued to approve promotions even when he became aware of the inaccuracy of claims.

Therese Chambers, the FCA Joint Executive Director, Enforcement and Market Oversight, said:

“Mr Huisamen should have ensured LCF’s financial promotions were ‘fair, clear, and not misleading’. However, under him, the approval process became an ineffective tick-box exercise – as a result, thousands of investors were persuaded to invest on the basis of highly misleading statements.”

Financial promotions can form significantly influence a consumer’s product knowledge and their decision-making when choosing a product. The news emphasises the responsibility held by firms to ensure that their financial promotions are fair, clear, not misleading, and do not result in poor outcomes for customers.

Firms should ensure that processes in place for the review and approval of Financial Promotions are robust. This includes promotions that may appear on websites and social media posts i.e. Facebook, X (formerly Twitter) or LinkedIn, so it’s important not to overlook any communication channels a firm may use and ensure marketing teams are aware of the regulations and key considerations surrounding financial promotions and adverts.

Support and Guidance for those involved in Marketing

Searchlight is hosting a live Financial Promotions webinar on 27th February to help those involved in producing marketing material to understand more about the key, applicable FCA rules and requirements.

Why attend?

The course examines what a financial promotion is and some do's and don’ts which can help to ensure that your advertising is compliant and can stand up to scrutiny. The session will benefit those responsible for compliance, management, and financial advertising. Record-keeping requirements and the approval process are also covered.

Learning Objectives

?? Understand FCA rules and requirements regarding advertising materials

?? Awareness of the impact the Advertising Standards Authority has on financial promotions

?? Understand the responsibilities of intermediaries, brokers and third parties

?? Understand how to approve a financial promotion from start to finish

?? Consider rules and requirements from your organisation’s perspective

?? Recognise and implement effective review and sign-off processes

?? Understand how to achieve best practices and recognise what good and bad promotions look like by observing examples and case studies

Register your place at: https://www.searchlightsolutions.co.uk/financial-promotions/