The FCA had found Arian Financial LLP had breached Principles 2 and 3 in respect of failings in its financial crime prevention systems and controls in relation to business introduced by the now infamous “Solo group”, and had decided to fine the firm nearly £750,000. The firm (which stopped trading in 2022) did not dispute liability, but did dispute the way in which the FCA had calculated the fine and made a reference to the Upper Tribunal in this respect.
The Tribunal reviewed the basis on which the FCA had calculated the fine and agreed with its assessment at all levels, except on the first level of disgorgement and the adjustment for deterrence (Step 4). The question was what “financial benefit derived directly from the breach” should mean. After reviewing several cases, the Tribunal said this should be assessed on a case by case basis. It was persuaded that it will sometimes be appropriate to deduct expenses that are directly referable to generation of revenue, such as cust
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