The UK’s Financial Conduct Authority announced on Tuesday, January 6th that it had fined the former investment banking business of the troubled Portuguese lender Banco Espirito Santo for failure to disclose the resignation of key members from one of its capital markets teams in 2013.
Execution Noble & Company Limited, a U.K. IB firm bought by Banco Espirito Santo in 2010, has been hit with a $367,290 fine by the Financial Conduct Authority for failure to inform the regulator after two-thirds of its internal sponsor team resigned from the form between in the summer and fall of 2013 and the bank continued to market its sponsor services during that period.
Of note, the FCA suspended the bank’s sponsor status back in December 2013. Execution Noble does not currently offer sponsor services, and it is not clear whether it will re-launch the business.
More on the FCA fine
The fine related to Execution Noble’s work as a sponsor. Sponsors are a big part of U.K. capital markets, as they help manage equity capital markets offerings for clients and offer financial and investment advice to London Stock Exchange-listed firms. All sponsors are monitored by the UK Listing Authority, a division of the FCA.
According to the statement from the FCA on Tuesday, this fine is “the first use of the FCA’s power to fine sponsors, introduced in 2013.”
Banco Espirito Santo defections
Analysts note that Peter Tracey, a former head of corporate broking at Espirito Santo, left the bank in the summer of 2013 together with 14 other employees across corporate broking, research and sales, to join competitor Liberum. Richard Crawley, a former co-head of corporate broking at Espírito Santo, also joined Liberum later in the fall of 2013.
FCA regulations require brokers are to notify the regulator of any significant changes to its sponsor team. According to the statement from the FCA, “the regulator only learned about one of these departures on 11 November 2013, through its general monitoring of press coverage.”