Catalyst Investment CEO Banned by FCA for Misleading Customers

The U.K. financial watchdog criticized Catalyst Investment Group Ltd., and banned its chief executive officer, Timothy Roberts, for misleading customers when promoting bonds from ARM Asset Backed Securities SA.

The Financial Conduct Authority said in an e-mailed statement today that the firm is unable to pay a fine of 450,000 pounds ($723,000) for “recklessly misleading investors” between 2009 and 2010. Catalyst failed to tell investors that Luxembourg-based ARM didn’t have a licence from its regulator to issue bonds, the FCA said.

“Catalyst showed a reckless disregard for investors’ interests, exposing them to significant risks,” Tracey McDermott, the FCA’s director of enforcement, said in the statement. “We expect firms, and their senior managers, to put customers’ needs first -- and will take tough action against those who fall short of our standards.”

Investors in the U.K. invested 54 million pounds in ARM bonds and “may lose a significant part of their investment,” the FCA said.

In addition to the corporate fine, Roberts was also told to pay a 450,000-pound penalty. The watchdog also issued fines of 100,000 pounds to Andrew Wilkins, Catalyst’s former finance director, and 20,000 pounds to Alison Moran, the firm’s former compliance officer.

Roberts and Wilkins are appealing the decision to a London financial tribunal, said Lara Joseph, a spokeswoman for the FCA.

Calls to telephone numbers listed for Catalyst seeking comment weren’t connected.

    Before it's here, it's on the Bloomberg Terminal.
    LEARN MORE