The chairman of the financial services watchdog has faced calls to resign over its handling of complaints by a whistleblower who later took his own life.
At its first annual public meeting to be held in Edinburgh, the Financial Conduct Authority’s board was bombarded with questions about the death of Simon Andreisz which has sparked a campaign calling for more transparency.
Among the 250 attending the meeting at the Assembly Rooms were others affected by misbehaviour, including fraud, and what they regarded as the FCA’s failure to adequately respond to their circumstances. One was moved to tears as he spoke of the mental trauma resulting from the actions of a fraudster which may see his home repossessed.
Mr Alder had earlier stated that Lea Paterson, a non-executive director of the FCA, would lead an independent inquiry into the Andreisz affair.
However, the founder of the Transparency Taskforce, Andy Agathangelou, said Ms Paterson could not be truly independent and called repeatedly for FCA chair Ashley Alder to step aside.
Leaving his seat to confront Mr Alder, seated with other board members on the stage, he said: “I would say you are incapable of protecting the integrity of the FCA. I call on you to resign.”
Mr Alder did not answer the request but instead stated: “I have heard the question and will move on” and said that non-executive directors were independent of the watchdog as it was their role to scrutinise the board.
“All of the non-executive directors are appointed by government, not the FCA,” said Mr Alder. “Secondly, we will absolutely, in the circumstances, take our role as independent non-executive directors seriously. Seriously. We considered that independent role very, very carefully in coming to a conclusion to appoint Lea to conduct a review.
“The findings will be public, so you will be able to scrutinise what we have done. When she reports, she will report to the board, to the non-executive directors, and, of course, we would expect her to come up with a view on how the FCA communicates with whistleblowers. I can guarantee that we will look at this with every ounce of seriousness it deserves.”
Mr Agathangelou persisted with his questions, stating that Mr Alder was failing in his statutory responsibility by failing to answer the questions put to him.
The meeting also heard about other high-profile cases, including Blackmore Bonds, Lonsdale and motor finance. Paul Carlier, a former trader at Lloyds Banking Group, who was a whistleblower over alleged fraudulent actions by the bank against its customers, also called for an independent review.
Asked by Daily Business after the meeting if he had been satisfied by the FCA’s responses, he said: “Not at all. They have a statutory duty to answer questions and they have dodged them.”
FCA chief executive Nikhil Rathi attempted to explain the extent of the “complex” work that the FCA has to confront and defended its handling of whistleblowing complaints.
“This is some of the most difficult, challenging work we face. We see around 1,300 cases a year. What I want to focus on is how we handle these matters in the context of our organisation, particularly how we provide counselling and support.
“Everyone in this organisation has a responsibility to provide appropriate support and counselling. We want to make sure that people who need counselling receive it, and, where necessary, we also refer our colleagues to those who are specially trained in this area so that they can receive the support they need.
“As you can see from some of the cases we have been involved in, we are dealing with matters that are considered at the highest levels of the courts in the UK, and we take a great deal of care in how we respond to the individuals involved.”
The meeting heard the tearful testimony of Bank of America whistleblower Wayne Johncock, who was a victim of jailed corporate fraudster Rajesh Ghedia. Mr Alder admitted he was “moved” on hearing of his experiences and agreed to meet him to discuss it further.
After the two-hour meeting, Mr Agathangelou said he was “flabbergasted, dismayed, frankly despondent by two things.
“First, the FCA chair has misled the audience by stating the non-executive director who will lead the review into the death of Mr Andreisz is independent.
“Mr Alder is presiding over what must look like a sham, a whitewash… whereby once again the FCA is looking to mark its own homework. The public needs a truly independent third party review exactly as requested by John McDonnell MP, chairman of the all-party parliamentary group.
“The second thing I am dismayed by is that despite the fact Wayne Johncock was practically begging for a meeting with Stephen Smart [joint executive director of enforcement and market oversight], he refused to agree to it.
“Mr Johncock was expressing how close he is to the edge. Only Ashley Alder stepped in at that point. This will continue to depress me for some time.”
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