Upper Tribunal Tax and Chancery Chamber

UT-2022-00097 - [2024] UKUT 00352 (TCC)

Fecha: 17-Sep-2024

Step 3: Mitigating and aggravating factors

Step 3: Mitigating and aggravating factors

(1)

The Authority may increase or decrease the amount of the financial penalty arrived at after Step 2, but not including any amount to be disgorged as set out in Step 1, to take into account factors which aggravate or mitigate the breach. Any such adjustments will be made by way of a percentage adjustment to the figure determined at Step 2.

(2)

The following list of factors may have the effect of aggravating or mitigating the breach:

(a)

the conduct of the firm in bringing (or failing to bring) quickly, effectively and completely the breach to the Authority's attention (or the attention of other regulatory authorities, where relevant);

(b)

the degree of cooperation the firm showed during the investigation of the breach by the Authority, or any other regulatory authority allowed to share information with the Authority;

(c)

where the firm’s senior management were aware of the breach or of the potential for a breach, whether they took any steps to stop the breach, and when these steps were taken;

(d)

any remedial steps taken since the breach was identified, including whether these were taken on the firm’s own initiative or that of the Authority or another regulatory authority; for example, identifying whether consumers or investors or other market users suffered loss and compensating them where they have; correcting any misleading statement or impression; taking disciplinary action against staff involved (if appropriate); and taking steps to ensure that similar problems cannot arise in the future. The size and resources of the firm may be relevant to assessing the reasonableness of the steps taken;

(e)

whether the firm has arranged its resources in such a way as to allow or avoid disgorgement and/or payment of a financial penalty;

(f)

whether the firm had previously been told about the Authority's concerns in relation to the issue, either by means of a private warning or in supervisory correspondence;

(g)

whether the firm had previously undertaken not to perform a particular act or engage in particular behaviour;

(h)

whether the firm concerned has complied with any requirements or rulings of another regulatory authority relating to the breach;

(i)

the previous disciplinary record and general compliance history of the firm;

(j)

action taken against the firm by other domestic or international regulatory authorities that is relevant to the breach in question;

(k)

whether Authority guidance or other published materials had already raised relevant concerns, and the nature and accessibility of such materials; and

(l)

whether the Authority publicly called for an improvement in standards in relation to the behaviour constituting the breach or similar behaviour before or during the occurrence of the breach.