ACCA council member Robert Jackson was waiting to learn his fate this week after an association disciplinary committee found him guilty of backdating Norwich Union policy applications in order to obtain free shares.
In a ruling last Friday, the committee also found three other partners in Jackson’s firm, Thomson Morely Jackson & Co, guilty of professional misconduct related to the backdating of NU applications. They are Andrew Brown, Ernest Thomson and David Wainwright.
The committee delayed an announcement of any penalty the four partners and firm will suffer until it publishes its reasons for the verdict – a process likely to take a fortnight.
The most severe penalty the four could suffer is expulsion from the association, but lesser punishments include fines and reprimands.
ACCA officials refused to comment on the case this week as the penalty had not yet been announced and pleas of mitigation had not yet been heard.
Any appeal would probably be heard next month. If the disciplinary committee’s decision was upheld, the defendants could seek a judicial review.
The association has, however, invested a large amount of time in the firm’s investigation and the resulting proceedings. The verdict is therefore likely to be seen as a demonstration of the association’s regulatory muscle, effective even when one of its own council members is involved.
The case was heard by a six-strong committee a fortnight ago, and lasted for three days. But the verdict was delayed until last Friday, when it was delivered to the tense defendents at ACCA’s Lincoln Inn Fields headquarters, after a further 90-minute delay beyond the scheduled time.
Committee members were told that the partners had been involved in the backdating of 67 application forms for NU insurance policies in the days surrounding its flotation announcement in early October 1996. Of these, 32 related to partners and staff in the firm and their families.
THE NORWICH UNION SHARE SAGA
There are growing indications that the action taken by ACCA against Thomson Morely Jackson & Co could kickstart more disciplinary actions against other financial professionals who backdated applications for Norwich Union policies.
Press reports following the insurance giant’s flotation announcement in October 1996 suggested the practice was widespread. And although they are reluctant to comment, other regulators and professional bodies appear to have been watching the ACCA case with interest.
There is also confusion surrounding Norwich Union’s role. Thomson Morely Jackson & Co argued strongly that NU appeared to have condoned backdating.
Although Norwich Union denies this, its agreement to accept ‘pipeline’ cases for three days after it froze its membership at midnight on 1 October caused confusion.
NU said this decision was taken so as not to disadvantage independent financial advisers who only sent in applications weekly.
But it spurred a frenzy of activity among those keen not to lose out on the opportunity to get free shares for themselves and their clients.
It was not until 5 October that press reports emerged of widespread backdating, including a strong NU condemnation of the practice, which Morely Jackson & Co say contradicts advice it was given on the telephone by NU staff.
In any case, by 5 October, all new applications would have already been sent off to meet the NU’s deadline.
In the following weeks, NU is understood to have referred a number of cases to the Personal Investments Authority. It is understood that the PIA referred the Thomson Morely Jackson case on to ACCA.
A PIA spokeswoman said: ‘We are aware of the issue and aware of the stance being taken by ACCA, but we cannot really comment on investigations.’ It wasn’t just independent financial advisers involved. National Westminster Bank’s insurance division suspended 18 staff in December over alleged backdating. Fourteen were severely reprimanded, while four were found to have no case to answer.
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