BancTrust chief contests FCA fine over undisclosed US and Venezuela measures

Carlos Ricardo Fuenmayor, chief executive of BancTrust, is contesting a £99,600 fine that the UK Financial Conduct Authority (FCA) decided to impose on him personally for failing to disclose a US regulatory sanction and the freezing of his bank accounts in Venezuela, the Financial Times reported on 7 June.

In a decision notice dated 16 April, the FCA found that Fuenmayor breached Statement of Principle 4 of its Approved Persons regime and Senior Manager Conduct Rule 4, which require individuals to disclose information the regulator would reasonably expect. Fuenmayor has referred the decision to the Upper Tribunal, and the findings remain provisional.

UNDISCLOSED MATTERS

The FCA said Fuenmayor did not disclose an investigation by the US Financial Industry Regulatory Authority (FINRA) that began in December 2017, or the resulting June 2019 sanction of a 15-month suspension and a $20,000 fine, until December 2021. He also did not disclose that Venezuela's National Financial Intelligence Unit had frozen the local-currency bank accounts of Fuenmayor, his Venezuelan companies and their directors in November 2019. The regulator identified several occasions when disclosure should have been made, including applications in May 2018, August 2018 and October 2019 and a compliance review in December 2020.

POLITICAL RETALIATION ARGUMENT

Fuenmayor argues that the Venezuelan freeze followed his sponsorship in November 2019 of a human-rights event critical of the government of then-president Nicolás Maduro, and that he had no obligation to disclose reprisals for sponsoring pro-democracy and human-rights activities, given that the UK government did not recognise the Maduro regime. He also contends that the impact of the freeze was negligible, and that the US matter was a technical breach involving registration requirements.