DISCIPLINARY ORDERS AND REGULATORY DECISIONS

Transcription

DISCIPLINARY ORDERS AND REGULATORY DECISIONS
Date published: 5 November 2014
Disciplinary orders
Disciplinary Committee tribunal orders
1
Mr Anthony James Barber FCA
3
2
Miss Clare Elizabeth Thomson ACA
6
3
Ms Michelle Mauro
9
4
Miss Karin Ann Mountain ACA
15
Cessation of Membership
5
Mr David Foister
Miss Clare Thomson
Mr Allan Speakman
21
Investigation Committee consent orders
6
Mr Michael Ackenson FCA
22
7
ST-Partnership
22
8
Wells Professional Partnership LLP
23
9
Mr Stephen Mark Katz FCA
24
10
Mr Murray Philip Patt FCA
24
11
Mr Jonathan Francis Portal FCA
24
12
Cox Costello & Horne Limited
25
13
Mr Richard Kenneth Cuan O’Shea ACA
25
14
Mr Jonathan Morley FCA
26
15
Mr Mark Andrew Bringloe ACA
26
16
Mr David Richard Meacher-Jones FCA
27
17
Mrs Trudi Clark ACA
27
18
Mr Grant Peter smith ACA
28
1
Regulatory orders
Audit Registration Committee regulatory penalties and withdrawals
19
Henn & Westwood
29
20
UHY Hacker Young LLP
29
21
Advise Up Ltd
29
22
Hunt and Partners Limited
30
23
TF & Partners Limited
30
2
DISCIPLINARY COMMITTEE TRIBUNAL ORDERS
1
Mr Anthony James Barber FCA of
11 Commonwealth Way, Thorpe St Andrew, Norwich, NR7 0UR
A tribunal of the Disciplinary Committee made the decision recorded below having heard a
formal complaint on 10 September 2014
Type of Member
Member
Terms of complaint
Mr A Barber FCA failed to provide by 21 April 2014 the information, explanations and documents
requested in a letter dated 1 April 2014 issued under Disciplinary Bye-law 13.
Mr Barber is therefore liable to disciplinary action under Disciplinary Bye-law 4.1c: ‘if he has
committed a breach of the bye-laws or of any regulations or has failed to comply with any order,
direction or requirement made, given or imposed under them’.
Hearing date
10 September 2014
Previous hearing dates
None
Pre-hearing review or final hearing
Final Hearing
Complaint found proved
Yes
All heads of complaint proven
Yes
Sentencing order
Severe reprimand; fine of £3,500
Procedural matters and findings
Parties present
Mr Barber was not present.
Represented
Mr Barber was not represented; the IC was
represented by Ms Raquel Perez.
Hearing in public or private
The hearing was in public.
3
Decision on service
In accordance with regulations 3-5 of the Disciplinary
Regulations, the tribunal was satisfied to service.
Documents considered by the tribunal
The tribunal considered the documents contained in
the Investigation Committee’s (IC’s) bundle together
with an email from Mr Barber to IC dated 9 September
2014 timed at 16.51.
The Investigation Committee’s (IC’s) case
1. The defendant was believed by ICAEW at all material times to have engaged in public
practice. However, he did not possess a practicing certificate. This caused the IC to
investigate the defendant’s work status in about September 2013 with a view to
establishing whether he needed a practising certificate.
2. On 24 January 2014, during these investigations, the defendant informed the IC on the
telephone (amongst other things) that he was employed by two of his clients whom he
invoiced for work done and he implied that he provided accounting services to them in that
capacity. He also stated that he had issued certificates to charities whom he had advised
over a three to four year period. The defendant agreed to provide, by 7 February 2014,
confirmation from his clients of his status as an employee and his payment by them by
rendering invoices. He also agreed to provide, by 7 February 2014, copies of the
certificates he had issued.
3. The Defendant failed to provide the confirmation and documents he said he would by 7
February 2014 or at all. Chasing him failed. Therefore, on 1 April 2014, a letter was sent
pursuant to Disciplinary Bye-law 13 requiring a response to the IC’s previous letters and
provision of the confirmation and certificates he said, in January 2014, he would provide. A
response was requested by 28 April 2014. It is that letter which is the subject of this
complaint.
4. No reply to that letter was received nor any of the information sought in it. That failure
caused this complaint to be made.
5. The first material response from the defendant was by an email sent at 16.51 on 9
September 2014, just over half an hour away from close of business on that day and on the
eve of the hearing. The defendant stated that was unable to attend the hearing because of
a conflicting “pre-set” meeting. He annexed his CV and referred the IC to his profile on
Linked In, as proof, he stated, of his employment status. He did not provide any of the
documents or evidence required of him by the IC in its letter dated 1 April 2014.
Issues of fact and law
6. The issues are whether (i) a letter was sent to the defendant pursuant to DBL 13 dated 1
April 2014 and (ii) whether the defendant failed to provide the information, explanations and
documents requested by 21 April 2014.
7. The tribunal found the complaint proved.
4
Conclusions and reasons for decision
8. Disciplinary Bye-law 13 empowers the IC to serve a notice requiring a member to provide
information, and it imposes a duty on the member to comply with it within fourteen days or
such other time as the notice specifies.
9. The defendant has failed to provide to the IC a response to a formal request for information
relating to his status as an accountant in public practice. The origin of the request was
concern that the defendant had been (and was) engaged in public practice without a
practising certificate. Practising without a practising certificate is a serious matter and may
be serious professional misconduct. The letter dated 1 April 2014 was an appropriate one
to send. The defendant failed to respond to that letter by the time stipulated or at all which
was irresponsible and unacceptable given the subject matter of the correspondence. The
email the defendant sent on 9 September 2014 was inadequate because it provided none
of the information the IC had been seeking. This is serious professional misconduct in all
the circumstances.
Matters relevant to sentencing
10. The tribunal considered the Guidance on Sentencing and saw no reason to depart from
that. It ensured that no lesser penalty should be imposed. A mitigating factor was the
defendant’s clean disciplinary record. An aggravating factor was the defendant’s failure to
respond to the letter dated 1 April 2014 at all, even as late as 9 September 2014.
Sentencing Order
Severe reprimand
Fine of £3,500
Costs of £1,399
Decision on publicity
Publication with name.
Non Accountant Chairman
Mr Paul Brooks
Accountant Member
Mr Mike Ranson FCA
Accountant Member
Mr Martin Ward FCA
Legal Assessor
Mr Dominic Spenser Underhill
021310
5
2
Miss Clare Elizabeth Thomson ACA of
Oracle Corporation Australia Pty Limited, Tower 5A, 4 Julius Avenue NORTH RYDE, NSW,
2113. AUSTRALIA
Type of Member
Member
Terms of complaint
1. Between 31 January 2011 and 11 September 2013, Miss C Thomson ACA failed to certify
compliance with Continuing Professional Development requirements for the period 1
November 2009 to 31 October 2010, in breach of Principal Bye-law 56(c).
2. Between 31 January 2012 and 11 September 2013 2013, Miss C Thomson ACA failed to
certify compliance with Continuing Professional Development requirements for the period 1
3. Between 31 January 2013 and 11 September 2013, Miss C Thomson ACA failed to certify
compliance with Continuing Professional Development requirements for the period 1
Miss C Thomson is therefore liable to disciplinary action under Disciplinary Bye-law 4.1c: ‘if she
has committed a breach of the bye-laws or of any regulations or has failed to comply with any
order, direction or requirement made, given or imposed under them’.
Hearing date
10 September 2014
Previous hearing dates
None
Final Hearing
Yes
Yes
Sentencing order
Reprimand; fine of £1000
Procedural matters and findings
Parties present
Miss Thomson was not present.
Represented
Miss Thomson was not represented; the Investigation
Committee (IC was represented by Raquel Perez.
The hearing was in public.
Decision on service
6
the Investigation Committee’s (IC’s) bundle.
The Investigation Committee’s (IC’s) case
1. On 1 July 2005, the Continuing Development Regulations (“CPD Regulations”) came into
force. They require that a member acquires the appropriate amount of CPD in any one
year, and certifies that to ICAEW. Regulation 5 of those regulations provides that members
shall complete a certificate relating to compliance with Principal Bye-law 56.
2. Principal Bye-law 56 (c) requires members to “certify annually to ICAEW compliance with
these provisions”, which includes the CPD Regulations.
3. In accordance with Principal Bye-law 56(c), The defendant certified her CPD compliance up
to the year ended 31 October 2009. However, she failed to do so subsequently or at all. All
attempts by ICAEW at contacting the Defendant about the matter have failed.
Issues of fact and law
4. The issue to be determined is whether the defendant failed to certify her compliance with
the CPD Regulations for the aggregate period of 1 November 2009 – 31 October 2012 and
thus breached Principal Bye-law 56(c).
5. The tribunal found the complaint proved.
Conclusions and reasons for decision
6. The defendant was obliged to certify her compliance with the CPD Regulations but failed to
do so in three successive years. This is serious professional misconduct and requires a
penalty. It is serious because it prevents ICAEW from ensuring that one of its members
maintains the correct amount of continuing professional development, and its seriousness
is compounded because it has occurred on three occasions.
Matters relevant to sentencing
7. The tribunal considered the Guidance on Sentencing and saw no reason to depart from
that. It ensured that no lesser penalty should be imposed. A mitigating factor was the
Defendant’s clean disciplinary record. Aggravating factors were the Defendant’s complete
lack of responsiveness and co-operation with the investigation of the matter and the
repeated occurrence of the misconduct. However, the severity of repeated occurrence was
reduced by the fact that ICAEW could have taken, but did not take, any action sooner than
it did.
Sentencing Order
1. Reprimand
2. Fine of £1,000
3. Costs of £2224
Decision on publicity
Publication with name.
7
Non Accountant Chairman
Mr Paul Brooks
Accountant Member
Mr Mike Ranson FCA
Accountant Member
Mr Martin Ward FCA
Legal Assessor
Mr Dominic Spenser Underhill
012764
8
3
Ms Michelle Mauro of
7 Regan Way, Chetwynd Business Park, Chilwell NOTTINGHAM, NG9 6RZ.
Type of Member
Affiliate
Terms of complaint
The complaint is that Michelle Mauro is liable to disciplinary action under Disciplinary Bye-law 4.1
a.
…in the course of carrying out professional work or otherwise she has committed any act or default
likely to bring discredit on [herself], the Institute or the profession of accountancy
because:
Between April 2008 and October 2008 Michelle Mauro CTA acted contrary to s.110 of the Code of
Ethics, Integrity in that she accessed the emails of three of the directors of ‘A’ Ltd without their
knowledge or permission.
Hearing date
16 September 2014
Previous hearing date
None
Final Hearing
Yes
Yes
Sentencing order
Reprimand
Costs of £1,500
Parties present
Mr Benjamin Jowett on behalf of the Investigation
Committee (“IC”)
Professor Watson-Gandy on behalf of Ms Mauro.
The hearing was in public
Decision on service
the IC’s bundle.
Preliminary Matters
1.
At the outset of the hearing, the Chairman raised a number of preliminary matters with the
parties:
9
a.
Prior to the hearing, the Chairman had notified the parties in writing that he had had a
professional relationship with a person who had provided a character reference for Ms
Mauro and Ms Mountain and asked the parties if there were any objections to him
hearing the complaint. They did not respond. At the outset of the hearing, the parties
confirmed that there were no objections to him hearing the complaint.
b.
The parties consented to the cases of Ms Mountain and Ms Mauro being heard
together.
c.
The parties agreed with the legal assessor’s advice that there was no jurisdictional
issue arising from the fact that a complaint arising from the facts underlying this
complaint had already been dealt with by another regulator. The parties agreed that the
previous findings were relevant to sentencing.
Background
2.
By way of an undated letter to ICAEW, received on 8 July 2011, Ms Mountain and Ms Mauro
self-reported a matter of professional misconduct relating to their having accessed former
colleagues’ email accounts with authorisation. The previous day, three former colleagues
had complained to ICAEW.
3.
Ms Mauro had been a senior manager and Ms Mountain had been a director at ‘A’ Ltd. In
early 2008, ‘A’ Ltd decided to hive off that part of its business that dealt with tax avoidance
schemes for amounts under £1m. After negotiations, it was agreed that Ms Mountain and Ms
Mauro (referred together below as “MM”) would establish a new, spin-off business, ‘B’ LLP to
handle schemes worth less than £1m, which ‘A’ Ltd would refer to it.
4.
‘B’ LLP started trading on 7 April 2008. By agreement, MM took eight members of ‘A’ Ltd
staff with them. Whilst the arrangement was initially amicable, MM soon came to distrust ‘A’
Ltd considering that it regretted the decision to hive off and was about to begin a spoiling
campaign.
5.
When MM left ‘A’ Ltd, they knew the email passwords of directors and staff. They contend
this was necessary prior to the hive off to ‘B’ LLP to enable correspondence to be dealt with
efficiently in case of absence. They thus did not gain access to the directors’ email
passwords by any surreptitious means.
6.
After ‘B’ LLP had been established, MM independently intercepted emails sent to three ‘A’
Ltd directors to determine whether they were trying to undermine ‘B’ LLP. Each defendant
only later discovered that the other had also been accessing emails. The emails of two
directors were accessed from April to August 2008 until their passwords were changed. The
emails of a third director was accessed until October 2008. Mrs Mountain contends that they
stopped accessing his email before he changed his password. At around this time, MM’s
unlawful access was discovered by ‘A’ Ltd.
7.
Ms Mauro decided to stop intercepting emails because it was causing her stress and a
distraction from running ‘B’ LLP. Ms Mountain decided to stop because she found the emails
upsetting.
8.
‘B’ LLP brought legal proceedings against ‘A’ Ltd in September 2009 relating to ‘B’ LLP
licensing a strategy to ‘A’ Ltd. On 23 July 2010, for the first time, ‘A’ Ltd’s solicitors
complained about the unauthorised access of the email accounts. MM took legal advice and
were surprised to find that they had acted unlawfully. Although they wanted to apologise,
their solicitors advised them not to or make any admissions.
10
9.
On 21 September 2010, ‘A’ Ltd issued court proceedings against MM in respect of the
improper interception of emails. MM’s solicitors advised them not to serve a defence. Hence,
judgment was entered against them in default of a defence on 13 December 2010. MM were
ordered to serve affidavits explaining what had happened and provide details of emails
improperly accessed.
10.
Prior to a further hearing to assess damages, the parties settled the case by way of
mediation. It was agreed that MM would pay £300,000 to ‘A’ Ltd and £300,000 to each of the
three directors (a total of £1.2m). This sum was payable solely in respect of damages for
breach of privacy. There was no clause as to confidentiality. Hence, ‘A’ Ltd subsequently
issued a press release regarding the terms of settlement, which they sent to all their
introducers, clients and other professional contacts.
Findings by the Police and the Chartered Institute of Taxation
11.
On 30 March 2012, Nelsons Solicitors (acting for MM) wrote to the ICAEW case manager
confirming that ‘A’ Ltd had reported the improper access to the email accounts to the police
who had dealt with the matter by way of cautions. They argued that the decision to caution
MM, “reflected the police taking into account the full cooperation of … [MM], the age of the
incidents, the low risk of any repetition and as what they considered a proportionate
response to the complaints in all the circumstances”.
12.
On 26 June 2012, the Chartered Institute of Taxation sent ICAEW details of the outcome of
their own disciplinary case (both MM being members of that Institute). In accepting the
mitigating circumstances brought to that tribunal’s attention and that they did not gain any
commercial advantage as a result of their conduct, the tribunal censured MM and ordered
each to pay costs of £1,685.50.
Dealings with the ICAEW
13.
On 7 July 2011 three ‘A’ Ltd directors complained about Ms Mountain and the email
interceptions. In an email from one of them on 2 August 2011, the complaint extended to Ms
Mauro when they became aware that she was an ICAEW affiliate.
14.
On 15 August 2011, MM submitted statements to ICAEW, in which they explained the
position in more detail. Both accept that their behaviour “…was wholly inexcusable and
wrong”. Ms Mauro also stated that “…it never occurred to me at the time that this activity
could amount to an offence especially as I was in no way dishonest in what I did”.
15.
Ms Mountain contacted ICAEW’s helpline around July 2010 for advice but she says she was
not told she needed to report the matter. Lawyers also advised MM not to make any
admission outside certain related court processes. Hence, they did not self-report to ICAEW
at that time. The court proceedings were over in June 2011 and at that point, Ms Mountain
spoke to ICAEW’s helpline again and specifically asked about the requirement to self-report
and were advised that she should take legal advice. MM concluded that it would now be
appropriate to self-report to ICAEW and they did so.
16.
On 23 August 2012, the case manager confirmed to MM respectively, the terms of the
complaints. On 24 September 2012, Nelsons submitted final representations on behalf of
MM.
11
Written Submissions: mitigating factors
17.
In their letter dated 24 September 2012, Nelsons set out the following mitigating factors in
favour of MM:
a.
The events were over four years old.
b.
The events arose from a specific and unique set of factors arising from the relationship
of the parties involved, which were not going to repeat themselves in the future.
c.
The ‘A’ Ltd directors only pursued the allegation after they faced a court claim by ‘B’
LLP. The allegations were first raised on 23 July 2010, some two years after the
events.
d.
The complainants have been compensated through the mediation settlement.
e.
The police have dealt with the matter by way of caution.
f.
The Taxation Disciplinary Board of the Chartered Institute of Taxation had (only)
censured MM.
g.
MM were unable to fully present their case due to restrictions imposed under a court
order, from which the ‘A’ Ltd directors would not release them.
h.
They have suffered on-going stress arising from the civil proceedings, police
investigation, CIOT investigation and hearing; and ICAEW’s investigation. They have
co-operated fully and have made full admissions and an unreserved apology.
i.
Otherwise, they have an exemplary record.
j.
Natural justice would suggest that for their clients to have to face yet another forum
and another sanction in all these circumstances is an unjust, unfair and
disproportionate burden in circumstances where they already appear to have suffered
disproportionately for their conduct. It is difficult to understand what a further sanction
is likely to achieve or how it could be just.
k.
‘A’ Ltd had already given extensive publicity about the unauthorised access, although it
was prepared not to do so if the defendants paid them further significant sums in the
mediation settlement.
l.
Neither Ms Mountain nor Ms Mauro disclosed the contents of the emails to anyone
other than to each other or their husbands.
m.
They did not interfere with client records or emails.
n.
When employed by ‘A’ Ltd, the user names and passwords to access email accounts
were common knowledge.
o.
The reason they accessed the emails was to protect their staff and business.
p.
There was no intention to cause harm to ‘A’ Ltd or any employee, or to gain any
commercial advantage.
q.
They did not appreciate that acting in this way was potentially unlawful.
r.
There was no dishonesty involved.
s.
They self-reported the matter.
t.
They have been supported by clients, introducers, staff and their business partner.
u.
They have paid significant amounts of compensation to ‘A’ Ltd and each of the
directors, and apologised.
12
18.
v.
They have suffered significant personal and professional embarrassment by ‘A’ Ltd
publicising the matter.
w.
They have suffered considerable stress. Their staff also suffered stress as a result of
being concerned about the impact on the business and the security of their jobs.
x.
Further punishment would affect both family members and employees who are
dependent on them.
y.
This matter is entirely out of character and neither has previously been reported to any
professional body.
Both MM have provided a number of references as to their good character, all of which
comment on their good work and integrity
The Hearing
19.
After dealing with the preliminary matters, Mr Jowett briefly took the tribunal through the
complaints about both MM. The Chairman asked Professor Watson-Gandy whether his
clients admitted the complaints and he confirmed that they did. He also pointed out that Ms
Mauro had ceased to be an affiliate member of the ICAEW but that the reason for this was
unconnected the facts underlying this complaint.
20.
Mr Jowett then confirmed that MM had no previous disciplinary record and made an
application for costs.
21.
Professor Watson-Gandy then made submissions in mitigation of sentence of both of his
clients. He stressed that:
a.
MM had already been punished for their actions.
22.
b.
It would not be appropriate and just to impose a further sentence upon MM.
c.
MM self-reported at the earliest possible time.
d.
They had apologised unreservedly.
e.
Their actions were totally out of character.
f.
They had a number of good character references.
g.
h.
There was no likelihood of them repeating their offending behaviour.
There no were allegations of dishonesty.
He didn’t resist the IC being awarded its costs in principle but questioned the level of costs
being claimed. Mr Jowett explained that the higher level of costs was due to the fact that the
complainants had raised a number of issues over the years.
Sentencing
23.
The tribunal reminded itself that the complaint had been brought solely on the basis that MM
had acted contrary to s.110 of the Code of Ethics and that sentence should be assessed on
that basis.
24.
The tribunal referred itself to the Guidance on Sentencing (August 2013). In respect of both
heads of complaint, the relevant Chapter is Chapter 12 (Ethical).The tribunal considered that
MM’s conduct fell within f2, “Other departure from fundamental principles, Code of Ethics
without justification” for which the starting point was a reprimand and fine of £2,650.
13
25.
The tribunal considered that given the great deal of mitigation in the case, even after
weighting the various mitigating factors, and the fact that MM had both clearly been punished
both financially and reputationally, that they should not be fined. However, the tribunal
considered that it was important in the public interest to make clear that the ICAEW
disapproved such behaviour and it was thus necessary to issue a reprimand.
The Sentencing Order
26.
The tribunal ordered as follows:
(1) Ms Mauro is reprimanded.
(2) Ms Mauro is ordered to pay the IC’s costs summarily assessed at £1,500.
Chairman
Mr David Wilton FCA
Accountant Member
Mr Mike Ranson FCA
Non Accountant Member
Ms Mary Kelly
Legal Assessor
Mr Jonathan Lewis
006630
14
4
Miss Karin Ann Mountain ACA of
7 Regan Way, Chetwynd Business Park, Chilwell NOTTINGHAM, NG9 6RZ
Type of Member
Member
Terms of complaint
The complaint is that Mrs Karin Ann Mountain is liable to disciplinary action under Disciplinary Byelaw 4.1 a
…in the course of carrying out professional work or otherwise (s)he has committed any act or
default likely to bring discredit on [her]self, the Institute or the profession of accountancy
because:
Between April 2008 and October 2008 Karin Mountain ACA CTA acted contrary to s110 of the
Code of Ethics, Integrity in that she accessed the emails of three of the directors of ‘A’ Ltd without
their knowledge or permission.
Hearing date
16 September 2014
Previous hearing date
None
Final Hearing
Yes
Yes
Sentencing order
Reprimand
Costs of £1,500
Parties present
Mr Benjamin Jowett on behalf of the Investigation
Committee (“IC”)
Professor Watson-Gandy on behalf of Ms Mountain
The hearing was in public
Decision on service
the IC’s bundle.
Preliminary Matters
1. At the outset of the hearing, the Chairman raised a number of preliminary matters with the
parties:
15
a.
Prior to the hearing, the Chairman had notified the parties in writing that he had had a
professional relationship with a person who had provided a character reference for Ms
Mauro and Ms Mountain and asked the parties if there were any objections to him
hearing the complaint. They did not respond. At the outset of the hearing, the parties
confirmed that there were no objections to him hearing the complaint.
b.
The parties consented to the cases of Ms Mountain and Ms Mauro being heard
together.
c.
The parties agreed with the legal assessor’s advice that there was no jurisdictional
issue arising from the fact that a complaint arising from the facts underlying this
complaint had already been dealt with by another regulator. The parties agreed that the
previous findings were relevant to sentencing.
Background
2. By way of an undated letter to ICAEW, received on 8 July 2011, Ms Mountain and Ms Mauro
self-reported a matter of professional misconduct relating to their having accessed former
colleagues’ email accounts with authorisation. The previous day, three former colleagues had
complained to ICAEW.
3. Ms Mauro had been a senior manager and Ms Mountain had been a director at ‘A’ Ltd. In early
2008, ‘A’ Ltd decided to hive off that part of its business that dealt with tax avoidance schemes
for amounts under £1m. After negotiations, it was agreed that Ms Mountain and Ms Mauro
(referred together below as “MM”) would establish a new, spin-off business, ‘B’ LLP to handle
schemes worth less than £1m, which ‘A’ Ltd would refer to it.
4. ‘B’ LLP started trading on 7 April 2008. By agreement, MM took eight members of ‘A’ Ltd staff
with them. Whilst the arrangement was initially amicable, MM soon came to distrust ‘A’ Ltd
considering that it regretted the decision to hive off and was about to begin a spoiling
campaign.
5. When MM left ‘A’ Ltd, they knew the email passwords of directors and staff. They contend this
was necessary prior to the hive off to ‘B’ LLP to enable correspondence to be dealt with
efficiently in case of absence. They thus did not gain access to the directors’ email passwords
by any surreptitious means.
6. After ‘B’ LLP had been established, MM independently intercepted emails sent to three A’ Ltd
directors to determine whether they were trying to undermine ‘B’ LLP. Each defendant only
later discovered that the other had also been accessing emails. The emails of two directors
were accessed from April to August 2008 until their passwords were changed. The emails of a
third director was accessed until October 2008. Ms Mountain contends that they stopped
accessing his email before he changed his password. At around this time, MM’s unlawful
access was discovered by ‘A’ Ltd.
7. Ms Mauro decided to stop intercepting emails because it was causing her stress and a
distraction from running ‘B’ LLP. Ms Mountain decided to stop because she found the emails
upsetting.
8. ‘B’ LLP brought legal proceedings against ‘A’ Ltd in September 2009 relating to ‘B’ LLP
licensing a strategy to A’ Ltd. On 23 July 2010, for the first time, ‘A’ Ltd’s solicitors complained
about the unauthorised access of the email accounts. MM took legal advice and were surprised
to find that they had acted unlawfully. Although they wanted to apologise, their solicitors
advised them not to or make any admissions.
16
9. On 21 September 2010, ‘A’ Ltd issued court proceedings against MM in respect of the
improper interception of emails. MM’s solicitors advised them not to serve a defence. Hence,
judgment was entered against them in default of a defence on 13 December 2010. MM were
ordered to serve affidavits explaining what had happened and provide details of emails
improperly accessed.
10. Prior to a further hearing to assess damages, the parties settled the case by way of mediation.
It was agreed that MM would pay £300,000 to ‘A’ Ltd and £300,000 to each of the three
directors (a total of £1.2m). This sum was payable solely in respect of damages for breach of
privacy. There was no clause as to confidentiality. Hence, ‘A’ Ltd subsequently issued a press
release regarding the terms of settlement, which they sent to all their introducers, clients and
other professional contacts.
Findings by the Police and the Chartered Institute of Taxation
11 On 30 March 2012, Nelsons Solicitors (acting for MM) wrote to ICAEW’s case manager
confirming that ‘A’ Ltd had reported the improper access to the email accounts to the police
who had dealt with the matter by way of cautions. They argued that the decision to caution
MM, “reflected the police taking into account the full cooperation of … [MM], the age of the
incidents, the low risk of any repetition and as what they considered a proportionate response
to the complaints in all the circumstances”.
12 On 26 June 2012, the Chartered Institute of Taxation sent ICAEW details of the outcome of
their own disciplinary case (both MM being members of that Institute). In accepting the
mitigating circumstances brought to that tribunal’s attention and that they did not gain any
commercial advantage as a result of their conduct, the tribunal censured MM and ordered each
to pay costs of £1,685.50.
Dealings with the ICAEW
13 On 7 July 2011 three A’ Ltd directors complained about Ms Mountain and the email
interceptions. In an email from one of them on 2 August 2011, the complaint extended to Ms
Mauro when they became aware that she was an ICAEW affiliate.
14 On 15 August 2011, MM submitted statements to ICAEW, in which they explained the position
in more detail. Both accept that their behaviour “…was wholly inexcusable and wrong”. Ms
Mauro also stated that “…it never occurred to me at the time that this activity could amount to
an offence especially as I was in no way dishonest in what I did”.
15 Ms Mountain contacted ICAEW’s helpline around July 2010 for advice but she says she was
not told she needed to report the matter. Lawyers also advised MM not to make any admission
outside certain related court processes. Hence, they did not self-report to ICAEW at that time.
The court proceedings were over in June 2011 and at that point, Ms Mountain spoke to
ICAEW’s helpline again and specifically asked about the requirement to self-report and were
advised that she should take legal advice. MM concluded that it would now be appropriate to
self-report to ICAEW and they did so.
16 On 23 August 2012, the case manager confirmed to MM respectively, the terms of the
complaints. On 24 September 2012, Nelsons submitted final representations on behalf of MM.
17
Written Submissions: mitigating factors
17 In their letter dated 24 September 2012, Nelsons set out the following mitigating factors in
favour of MM:
a. The events were over four years old.
b. The events arose from a specific and unique set of factors arising from the relationship of
the parties involved, which were not going to repeat themselves in the future.
c. The ‘A’ Ltd directors only pursued the allegation after they faced a court claim by ‘B’ LLP.
The allegations were first raised on 23 July 2010, some two years after the events.
d. The complainants have been compensated through the mediation settlement.
e. The police have dealt with the matter by way of caution.The
f. Taxation Disciplinary Board of the Chartered Institute of Taxation had (only) censured
MM.
g. MM were unable to fully present their case due to restrictions imposed under a court
order, from which the ‘A’ Ltd directors would not release them.
h. They have suffered on-going stress arising from the civil proceedings, police
investigation, CIOT investigation and hearing; and ICAEW’s investigation. They have cooperated fully and have made full admissions and an unreserved apology.
i.
Otherwise, they have an exemplary record.
j.
Natural justice would suggest that for their clients to have to face yet another forum and
another sanction in all these circumstances is an unjust, unfair and disproportionate
burden in circumstances where they already appear to have suffered disproportionately
for their conduct. It is difficult to understand what a further sanction is likely to achieve or
how it could be just.
k. ‘A’ Ltd had already given extensive publicity about the unauthorised access, although it
was prepared not to do so if the defendants paid them further significant sums in the
mediation settlement.
l.
Neither Ms Mountain nor Ms Mauro disclosed the contents of the emails to anyone other
than to each other or their husbands.
m. They did not interfere with client records or emails.
n. When employed by ‘A’ Ltd, the user names and passwords to access email accounts
were common knowledge.
o. The reason they accessed the emails was to protect their staff and business.
p. There was no intention to cause harm to ‘A’ Ltd or any employee, or to gain any
commercial advantage.
q. They did not appreciate that acting in this way was potentially unlawful.
r. There was no dishonesty involved.
s. They self-reported the matter.
t. They have been supported by clients, introducers, staff and their business partner.
u. They have paid significant amounts of compensation to ‘A’ Ltd and each of the directors,
and apologised.
v. They have suffered significant personal and professional embarrassment by ‘A’ Ltd
publicising the matter.
18
w. They have suffered considerable stress. Their staff also suffered stress as a result of
being concerned about the impact on the business and the security of their jobs.
x. Further punishment would affect both family members and employees who are
dependent on them.
y. This matter is entirely out of character and neither has previously been reported to any
professional body.
18
Both MM have provided a number of references as to their good character, all of which
comment on their good work and integrity
The Hearing
19
After dealing with the preliminary matters, Mr Jowett briefly took the tribunal through the
complaints about both MM. The Chairman asked Professor Watson-Gandy whether his
clients admitted the complaints and he confirmed that they did. He also pointed out that Ms
Mauro had ceased to be an affiliate member of the ICAEW but that the reason for this was
unconnected the facts underlying this complaint.
20
Mr Jowett then confirmed that MM had no previous disciplinary record and made an
application for costs.
21
Professor Watson-Gandy then made submissions in mitigation of sentence of both of his
clients. He stressed that:
a. MM had already been punished for their actions.
b. It would not be appropriate and just to impose a further sentence upon MM.
c. MM self-reported at the earliest possible time.
d.
They had apologised unreservedly.
e.
Their actions were totally out of character.
f.
They had a number of good character references.
g.
There was no likelihood of them repeating their offending behaviour.
h.
There no were allegations of dishonesty.
22 He didn’t resist the IC being awarded its costs in principle but questioned the level of costs
being claimed. Mr Jowett explained that the higher level of costs was due to the fact that the
complainants had raised a number of issues over the years.
Sentencing
23 The tribunal reminded itself that the complaint had been brought solely on the basis that MM
had acted contrary to s.110 of the Code of Ethics and that sentence should be assessed on
that basis.
24 The tribunal referred itself to the Guidance on Sentencing (August 2013). In respect of both
heads of complaint, the relevant Chapter is Chapter 12 (Ethical).The tribunal considered that
MM’s conduct fell within f2, “Other departure from fundamental principles, Code of Ethics
without justification” for which the starting point was a reprimand and fine of £2,650.
19
25 The tribunal considered that given the great deal of mitigation in the case, even after weighting
the various mitigating factors, and the fact that MM had both clearly been punished both
financially and reputationally, that they should not be fined. However, the tribunal considered
that it was important in the public interest to make clear that the ICAEW disapproved such
behaviour and it was thus necessary to issue a reprimand.
The Sentencing Order
26 The tribunal ordered as follows:
1) Ms Mountain is reprimanded.
2) Ms Mountain is ordered to pay the IC’s costs summarily assessed at £1,500.
Chairman
Mr David Wilton FCA
Accountant Member
Mr Mike Ranson FCA
Non Accountant Member
Ms Mary Kelly
Legal Assessor
Mr Jonathan Lewis
006629
20
CESSATION OF MEMBERSHIP
5
The following individual has ceased to be a member because of failure to pay outstanding
fines and costs:
Mr David Foister of Kettering
Miss Clare Thomson of North Ryde, Australia
Mr Allan Speakman of Cheshire
ICAEW takes all necessary steps including legal proceedings to recover the money it is
owed.
21
INVESTIGATION COMMITTEE CONSENT ORDERS
6
Mr Michael Ackenson FCA
Consent order made on 1 September 2014
With the agreement of Mr Michael Ackenson of 88-98 College Road, Harrow, Middlesex, HA1
1RA, the Investigation Committee made an order that he be reprimanded, fined £2,650 and pay costs
of £1,300 with respect to a complaint that:
Mr M Ackenson FCA improperly informed Mr X that he would join the proposed
application to wind up his company, when he only knew about the proposed application
because of his position as the company’s accountant, contrary to section 110.1 of the Code
of Ethics, integrity.
014104
7
ST-Partnership
With the agreement of ST-Partnership of Mandeville House, 45-47 Tudor Road, Harrow, HA3 5PQ,
the Investigation Committee made an order that the firm be reprimanded, fined £4,500 and pay costs
of £2,180 with respect to a complaint that:
ST Partnership carried out the audit of the financial statements of X Limited and its
subsidiary undertakings* for the three years ended 31 December 2011 in breach of Audit
Regulation 3.02 in that the firm should have adopted appropriate safeguards as required by
Ethical Standard 4, prior to the issue of the following audit reports:
A
B
C
Year ended 31 December 2009 – audit report signed on 19 July 2010
Year ended 31 December 2010 – audit report signed on 18 July 2011
Year ended 31 December 2011 – audit report signed on 22 August 2012
*Subsidiary undertakings are as follows (all audit reports signed on the same date):
a)
b)
c)
d)
e)
A Limited
B Limited
C Limited
D Limited
E Limited.
014447
22
8
Wells Professional Partnership LLP
With the agreement of Wells Professional Partnership LLP of 10 Lonsdale Gardens, Tunbridge
Wells, Kent, TN1 1NU, the Investigation Committee made an order that the firm be severely
reprimanded, fined £12,000 and pay costs of £4,705 with respect to a complaint that:
1.
On 25 October 2012 Wells Associates issued an unqualified audit report on the
financial statements of X Limited for the year ended 31 January 2012, in breach of
Audit Regulation 3.08, in that the financial statements did not comply with the
Companies Act 2006 or Financial Reporting Standard 28 ‘Corresponding Amounts’ in
that the corresponding amounts for the year ended 31 January 2011 were not shown.
2.
On 25 October 2012 Wells Associates issued an unqualified audit report on the
financial statements of X Limited for the year ended 31 January 2012, in breach of
Audit Regulation 3.08, in that the financial statements failed to comply with Financial
Reporting Standard 15 ‘Tangible Fixed Assets’ as:
i)
The firm failed to obtain sufficient audit evidence to confirm that plant and
machinery was correctly stated at market value.
ii)
The notes to the financial statements failed to disclose the information required
by paragraph 74 of FRS 15 in respect of assets valued in the period, in particular
(i) to (v) of (a) which states:
For each class of revalued assets:
3.
(i)
the name and qualifications of the valuer(s) or the valuer’s organisation and a
description of its nature;
(ii)
the basis or bases of valuation (including whether notional directly attributable
acquisition costs have been included or expected selling costs deducted);
(iii)
the date and amounts of the valuations;
(iv)
where historical cost records are available, the carrying amount that would have
been included in the financial statements had the tangible fixed assets been
carried at historical cost less depreciation;
(v)
whether the person(s) carrying out the valuation is (are) internal or external to
the entity.
Wells Associates prepared the following financial statements for X Limited on behalf of
the directors of the company, which stated that the company was entitled to exemption
from preparing consolidated accounts under section 398 of the Companies Act 2006
when this was not the case as the group did not meet the qualifying conditions:
a.
b.
Year ended 31 January 2010; and
Year ended 31 January 2011.
014066
23
9
Mr Stephen Mark Katz FCA
With the agreement of Mr Stephen Mark Katz of Pearl Assurance House, 319 Ballards Lane,
London, N12 8LY, the Investigation Committee made an order that he be reprimanded, fined £2,650
and pay costs of £3,021 with respect to a complaint that he:
Failed to have any or sufficient regard to paragraph 400.63 of the Code of Ethics in that
between 1 September 2009 and 30 November 2012 Mr Katz through his firm X LLP
caused or permitted various payments in total amounting to £132,000 to be paid to Y
Limited for marketing costs when in fact those payments amounted to the furnishing of
valuable consideration in return for the introduction of insolvency appointments to Mr
Katz.
013386
10
Mr Murray Philip Patt FCA
With the agreement of Mr Murray Philip Patt of Manchester Business Park, 3000 Aviator Way,
Manchester, M22 5TG, the Investigation Committee made an order that he be reprimanded, fined
£5,000 and pay costs of £2,155 with respect to a complaint that:
On 5 November 2012 Mr M P Patt FCA issued an audit report on behalf of this firm, X, on
the financial statements of Y Limited for the year ended 31 March 2012 when the audit was
not conducted with integrity, objectivity and independence, in breach of APB Ethical
Standard 1 paragraph 6 in that in October 2012 Mr Patt accepted a loan from a director of
the audited entity.
011523
11
Mr Jonathan Francis Portal FCA
With the agreement of Mr Jonathan Francis Portal of Burley Wood, Ashe, Basingstoke, RG25
3AG, the Investigation Committee made an order that he be severely reprimanded, fined £2,500 and
pay costs of £1,218 with respect to a complaint that:
Mr J Portal FCA while a director of X Ltd demonstrated by his behaviour that he was unfit to
be a director of a company. Full particulars of the matters alleged to have rendered him
unfit are set in a form of undertaking given by Mr Portal under the Company Directors
Disqualification Act 1986.
018962
24
12
Cox Costello & Horne Limited
With the agreement of Cox Costello & Horne Limited of Langwood House, 63-81 High Street,
Rickmansworth, Hertfordshire, WD3 1EQ, the Investigation Committee made an order that the firm
be severely reprimanded, fined £15,000 and pay costs of £5,380 with respect to a complaint that:
1
From 8 December 2008 to 28 February 2010, Cox, Costello & Horne Limited failed to
undertake appropriate verification and client due diligence procedures to comply with Section
5 of the Money Laundering Regulations 2007 in respect of Mr X when he engaged the firm
for the provision of personal tax services.
2
Cox, Costello & Horne Limited prepared and signed a letter dated 22 March 2010 addressed
to ‘To Whom it May Concern’ which stated ‘Mr X had built into this forecast a healthy level of
scepticism as to whether it would succeed, and we note that the turnover to date is
considerably more than this, perhaps approaching £20m’ without obtaining sufficient
plausible evidence to support that assertion.
3
Cox, Costello & Horne Limited prepared cash-flow forecasts for Y Limited dated 24 March
2010 without:
a. Having obtained sufficient evidence to support the forecasts; and / or
b. Having considered the plausibility of the supporting information.
4.
Cox, Costello & Horne Limited prepared and filed dormant accounts dated 30 September
2011 for Y Limited for the year ended 31 December 2010 without obtaining sufficient
evidence to support that the company was dormant.
011914
13
Mr Richard Kenneth Cuan O’Shea ACA
With the agreement of Mr Richard Kenneth Cuan O'Shea of Langdon House, Langdon Road, SA1
Swansea Waterfront, Swansea, SA1 8QY, the Investigation Committee made an order that he be
reprimanded, fined £3,000 and pay costs of £1,305 with respect to a complaint that:
Mr R O’Shea ACA, on behalf of his firm X, signed the following audit reports of Y Limited
contrary to Ethical Standard 2, paragraph 19, in that Mr O’Shea was a trustee of W and Z
which held material financial interests in X Limited:
a) Year ended 31 December 2009, audit report signed 27 September 2010;
b) Year ended 31 December 2010, audit report signed 10 August 2011;
c) Year ended 31 December 2011, audit report signed 27 September 2012; and
d) Year ended 31 December 2012, audit report signed 1 May 2013.
018988
25
14
Mr Jonathan Morley FCA
Consent order made on 3 October 2014
With the agreement of Mr Jonathan Morley of 17a Yorkersgate, Malton, North Yorkshire,
YO17 7AA, the Investigation Committee made an order that he be severely reprimanded, fined
£2,700 and pay costs of £2,985 with respect to a complaint that:
1
On or around 28 February 2010 Mr J Morley FCA filed the abbreviated accounts for X
Limited for the year ended 31 May 2009 with Companies House, when he knew or
should have known that the signature was not that of the director.
2
3
On or around 27 April 2011 Mr J Morley FCA filed the abbreviated accounts for X
4
5
On or around 17 August 2012 Mr J Morley FCA filed the abbreviated accounts for X
010390
15
Mr Mark Andrew Bringloe ACA
With the agreement of Mr Mark Andrew Bringloe of 31 Tanfield Drive, Radcliffe, Manchester,
M26 1GY, the Investigation Committee made an order that he be reprimanded, fined £2,300 and pay
costs of £2,180 with respect to a complaint that:
1. Between 10 October 2011 and 25 March 2014 Mr M A Bringloe ACA engaged in public
practice without holding a practising certificate, contrary to Principal Bye-law 51(a).
2. Between 10 October 2011 and 9 September 2013 Mr M A Bringloe ACA engaged in public
practice without professional indemnity insurance as required by Regulation 3.1 of the
Professional Indemnity Insurance Regulations.
016381
26
16
Mr David Richard Meacher-Jones FCA
With the agreement of Mr David Richard Meacher-Jones of 6 St. Johns Court, Vicars Lane,
Chester, CH1 1QE, the Investigation Committee made an order that he be severely reprimanded,
fined £6,350 and pay costs of £3,430 with respect to a complaint that:
1. Mr D Meacher-Jones FCA issued audit reports, on behalf of his firm, X Limited, on the
financial statements of
a) Y Limited, year ended 30 June 2012, audit report signed on 18 September 2012;
b) Z, period ended 31 August 2012, audit report signed on 13 December 2012;
c) A Limited, year ended 30 September 2012, audit report signed 19 March 2013;
d) A Limited, year ended 30 September 2012, audit report signed on 26 June 2013; and
e) B Limited (previously C Limited), year ended 30 April 2012, audit report signed
13 December 2012
but failed to obtain and submit external hot file reviews of those audits, in breach of the
conditions and restrictions imposed by the ARC which were effective from 23 May 2012.
2. Mr D Meacher-Jones FCA, on behalf of his firm, X Limited, accepted appointment as
statutory auditor on a date unknown between 26 May 2012 and 27 September 2013 of the
following companies without obtaining the prior approval of the ARC in breach of the
conditions and restrictions imposed by the ARC which were effective from 23 May 2012:
a) D Limited; and
b) E Limited.
016965
17
Mrs Trudi Clark ACA
With the agreement of Mrs Trudi Clark of 7 New Street, St. Peter Port, Guernsey, GY1 2PF, the
Investigation Committee made an order that she be reprimanded, fined £1,500 and pay costs of
£1,205 with respect to a complaint that:
Between 1 July 2009 and 13 May 2014 Mrs T Clark ACA engaged in public practice without
a practising certificate, contrary to Principal Bye law 51a.
020249
27
18
Mr Grant Peter Smith ACA
With the agreement of Mr Grant Peter Smith of Bute House, Montgomery Way, Rosehill, Carlisle,
CA1 2RW, the Investigation Committee made an order that he be severely reprimanded, fined £6,600
and pay costs of £2,692 with respect to a complaint that:
Mr Grant Smith ACA, on behalf of his firm, X, issued an Independent Examiner’s Report on
23 February 2012 to the Y Limited for the year ended 31 May 2011 when the examination
failed to review the payroll accounting records, in breach of the procedures laid down in the
general Directions given by the Charity Commission under section 43(7)(b) of the 1993
Charities Act.
012946
28
REGULATORY DECISIONS
AUDIT REGISTRATION COMMITTEE
ORDER – 10 SEPTEMBER 2014
19
Publicity statement
Henn & Westwood, Rumbow House, Rumbow, Halesowen, B63 3HU, has agreed to pay a
regulatory penalty of £7,500, which was decided by the Audit Registration Committee. This was in
view of the firm’s admitted breach of audit regulation 3.01 in that a person in a position to influence
the conduct and outcome of the audit acted as trustee of a trust that held a financial interest in an
audit client that was material to the trust.
022647
20
Publicity statement
UHY Hacker Young LLP, Quadrant House, 4 Thomas More Square, London, E1W 1YW has
agreed to pay a regulatory penalty of £16,650, which was decided by the Audit Registration
Committee. This was in view of the firm’s admitted breach of audit regulation 3.01, in that the firm
failed to eliminate a potential threat to its independence due to an immediate family member of a
person in a position to influence the conduct and outcome of the audit being employed by the
audited entity.
023102
21
Publicity statement
The registration as company auditor of Advise Up Ltd, 17 Trinity House, Station Road,
Borehamwood, Hertfordshire, WD6 1DA, was withdrawn on 30 September 2014 under audit
regulation 7.03 (h) of the Audit Regulations and Guidance 2008 for failure to comply with the
requirements of the audit regulations.
022433
29
22
Publicity statement
The registration as company auditor of Hunt and Partners Limited, 2A Zodiac House, Calleva Park,
Aldermaston, Reading, RG7 8HN, was withdrawn on 29 September 2014 under audit regulation
7.03(a) of the Audit Regulations and Guidance 2008, because the firm no longer satisfies the
eligibility requirements of audit regulation 2.02(a).
023179
ORDER – 8 OCTOBER 2014
23
Publicity statement
TF & Partners Limited, 36A Stockport Road, Romiley, Stockport, Cheshire, SK6 3AA, has agreed
to pay a regulatory penalty of £3,500, which was decided by the Audit Registration Committee.
This was in view of the firm’s admitted breach of audit regulations 2.03a and 6.06 in that the firm
failed to ensure that a director, appointed in 2012, had affiliate status and for the inaccurate
completion of its 2013 annual return.
023229
All enquiries to the Professional Conduct Department, T +44 (0)1908 546 293
30

DISCIPLINARY ORDERS AND REGULATORY DECISIONS

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