FSA fines former finance director 30,000 GBP for principles breaches

The Financial Services Authority (FSA) has fined Mr David Whistance, the former Finance Director of W Deb MVL Plc (WDM), 30,000 GBP for breaches of FSA Principles by failing to exercise due skill, care and diligence in carrying out his role and for failure to take reasonable steps to ensure the firm's accounting procedures and records complied with regulatory requirements. The failings occurred over a three and a half year period from 1 December 2001 to 3 May 2005.

Mr Whistance would have been fined 80,000 GBP but he qualified for the 30% discount for early settlement and the FSA has taken into account his personal financial circumstances.

Mr Whistance's failure to carry out his responsibilities to the required standard resulted in the firm being unable to monitor its own financial position and to comply with its regulatory reporting requirements. This resulted in the firm making total provisions of 66.3 million GBP in its accounts for 2004 and 2005 against assets viewed as irrecoverable. These provisions in turn led to concerns about the firm's solvency and to its former parent company, ING, waiving loans totalling 58 million GBP  to ensure it remained adequately capitalised. This was the subject of an earlier enforcement action against WDM which concluded on 15 January 2007 when it was fined 560,000 GBP for breaching FSA Principles.

FSA Director of Enforcement, Margaret Cole, said:

"The FSA holds senior management of regulated firms responsible for ensuring their firms are organised competently in order to meet their regulatory obligations.

"Failure by senior management to properly perform their roles poses a risk to the firm's financial health, the interests of their clients and ultimately to the UK's financial system."

The FSA found that Mr Whistance was personally culpable and in breach of Principles 6 and 7 of the FSA's Statements of Principle for Approved Persons as he had, among other things:

• failed to keep himself and the Board adequately informed as to the value of differences between cash balances and stock positions recorded by WDM and those recorded by its counterparties, and the potential impact of those differences on WDM's financial position for the years ending 2002, 2003 and 2004 (Principle 6);
• failed to take reasonable steps to ensure that WDM provided the external auditors with sufficient accounting records for the purposes of auditing the Firm's financial statements for the period ending September 2004 (Principle 6);
• failed to take reasonable steps to ensure WDM established and maintained adequate systems and controls relating to the making and retention of accounting)and
• failed to take reasonable steps to ensure that WDM established and maintained adequate formalised and written procedures for dealing with differences between cash balances and stock positions recorded by WDM and those recorded by its counterparties (Principle 7).

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