UT-2023-000032 - [2024] UKUT 00265 (TCC)

Ms Egan is currently Head of Risk, Compliance and Anti-Money Laundering for St. James’s Place (Middle East) Limited, but at the time we are concerned with she was Senior Business Risk Manager and her responsibilities were to oversee the conduct of SJP’s Partners. Ms Egan was cross-examined by Mr Fatchett, but her evidence was not challenged. We found Ms Egan to be a careful witness and have no hesitation in accepting her evidence.

On 30 January 2015, Ms Egan held a Partner Compliance Review meeting with Mr. Ashraf at his home (also his normal place of work). As part of her preparation for the meeting, she emailed Mr. Ashraf to confirm that she would review client files held centrally in advance but would require access to paper and electronic records during the face-to-face meeting. She reviewed a selection of pension transfer files in advance and identified that the circumstances of each client documented in the Confidential Financial Review (CFR) were practically identical. She extended the sample size and identified similar concerns on all files.

On 30 January 2015, on arrival at Mr. Ashraf’s home, she requested access to his electronic and paper client files. However, he told her that he had left his laptop at his in-law’s house. Ms Egan continued with the visit and asked Mr. Ashraf to clarify his understanding of the advice process, which he did. She also asked him specific questions about the files she had reviewed in advance. In response to her questions, on several occasions, Mr. Ashraf stated that a missing document may be in his upstairs office and went to retrieve it. On the third occasion, she accompanied him to his upstairs office and noted that his laptop was in his office. At this point, she asked Mr. Ashraf why he had said that his laptop was not available; he suggested it was a misunderstanding. Ms Egan then asked Mr. Ashraf to provide her with some missing suitability letters. These are a regulatory requirement. They are used to document the advice given to clients in an easily understandable format. He was unable to locate them in the electronic client file, so she asked whether he had sent them to clients at all and told him that he should be open and honest with her. He confirmed that he had sent the letters and would find them on his hard drive. She asked why the clients’ CFRs appeared to be identical and he was unable to provide an acceptable explanation. Ms Egan told Mr. Ashraf that she was terminating the meeting and would arrange a follow up meeting with him and his supervisor in the SJP Holborn office. She reiterated the importance of always being open and honest with her and his supervisor, and if he hadn’t followed the correct procedures, he should say so.

On 31 January 2015, Ms Egan received an email with various attachments including documents that Mr. Ashraf suggested were the missing suitability letters which he had sent to his clients. Having reviewed the documents attached to Mr. Ashraf’s email, Ms Egan formed the view that Mr. Ashraf had fabricated them, as the documents had been created after the meeting on 30 January 2015. On 2 February 2015, she produced a report which summarised all her findings and she exhibited this.

On 12 February 2015, Ms Egan met with Mr. Ashraf along with his supervisor and another colleague from SJP. During the meeting, Mr. Ashraf admitted that he had not followed the full advice process in around ten cases, as he had not waited for the suitability letter to be pre-approved and had instead presented a shorter summary of his recommendation to the clients and asked them to sign a standalone declaration page of a suitability letter.

When asked about the content of the CFRs being almost identical, Mr. Ashraf admitted that he had found a template which would be approved by the SJP Business Assurance Team and, to save time, he decided simply to change the clients’ name and address. He acknowledged that the processes were put in place to ensure that clients’ interests were protected and confirmed he would follow the agreed processes in future. He was asked if there were any other breaches of process he should share, and he confirmed there were none he could think of. He failed to admit that the suitability letters he had forwarded by email (on 31 January 2015) had been created after the meeting at his home until it was pointed out that the Word documents included a time stamp which showed when they were created and last edited. He subsequently admitted that there would be further examples of missing suitability letters and incomplete CFRs.

Ms Egan agreed to circulate the minutes of the meeting on 12 February. On 16 February 2015 she circulated the meeting minutes and received an email from Mr. Ashraf, in which he confirmed that the minutes were broadly accurate. He believed that ten (30%) of his clients had not received a suitability letter. The remainder had, although it was prior to Business Assurance approval, or they were issued later than required.

Ms Egan explained that, under normal circumstances, SJP would re-train advisers where concerns in respect of file quality were minor or administrative. However, the main concerns here related to Mr. Ashraf’s integrity, as he only admitted errors when they were shared directly and/or evidence was presented to him, and so she considered that retraining was not appropriate.

Ms Egan reported all this to senior management, who took the decision to terminate Mr. Ashraf’s contract with SJP.

The regulatory reference provided to the Authority by SJP commented that, “We identified during an internal investigation that Mr. Ashraf had failed to accurately complete client confidential reviews and Suitability letters. We also felt that Mr. Ashraf was not transparent during our investigation.”