Partners step down from Moore Stephens and banned from financial services work

Thursday 10 March 2016

The Senior Partner and Partner in charge of trust company business at Moore Stephens have left the firm after a JFSC review raised “significant issues” over standards of due diligence, tax advice, levels of commission charges and anti-money laundering standards.

Clive Barton MBE (pictured) and Kathleen Gillen took a “voluntary leave of absence” after a November 2014 inspection by the financial services regulator uncovered what it described as “a number of significant concerns”.

The pair stepped down from the company last year and have been banned from being involved in any financial services business until the JFSC gives them permission.

Mr Barton is a well-known figure in the Island who has served as a Director of Jersey Finance and Jersey Post, and who is a parish official responsible for finances at the Parish of St Helier. Ms Gillen’s responsibilities at the company included developing business and client relationship work with clients from India, Russia and the Middle East.

He declined to comment on the JFSC's statement this morning.

A statement from the regulator said that the ban was “necessary and proportionate” – but says that the firm has co-operated fully with their investigation and has put in place plans for restructuring and remediation, and has appointed a new Managing Director of the trust company business. You can read the JFSC statement in full here.

Mr Barton had been with Moore Stephens since 1971 – rejecting the chance of a playing contract at Chelsea as a young man to train as an accountant – rising to become Senior Partner in Jersey, and taking on responsibility for the group in Guernsey, the Isle of Man and Gibraltar.

In 2009, he was voted UK Accountant of the Year by Citywealth magazine.

The JFSC statement said that the areas of concern uncovered included failures to:

-       Do proper due diligence research on clients.

-       Properly verify the sources of funds.

-       Obtain proper tax advice and make proper tax disclosures.

-       Ensure that commission was charged in line with agreements.

-       Exercise proper governance over customer structures.

-       Maintain appropriate accounting records.

-       Implement a robust annual review process.

-       Comply with internal procedures.

-       Recognise, document and manage conflicts of interest.

-       Implement an effective complaint handling system.

-       Report internal suspicions to the Money Laundering Reporting Officer.

-       Have adequate regard for the compliance function.

The company say that the plans that they have put in place will ensure the trust business is in a strong position to grow in the future.

The JFSC’s statement said: “The issues identified by the on-site examination and subsequent reviews were significant; however, the partners of Moore Stephens have acknowledged the failings identified in respect of the Moore Stephens trust company business and, working in collaboration with the Commission, have taken appropriate steps to remedy the issues and strengthen the business.

“The Commission is committed to working with regulated entities to resolve issues whenever possible and appropriate.”