Marlborough Trust Company Limited, Marlborough Nominees Limited, Mr Nicholas Robert Hannah, Mr Adrian Bradley Howe, Mr David Charles Enevoldsen, Mr Benjamin John Tustin (2016-11-21)

Summary

This is a Public Statement issued by the Guernsey Financial Services Commission (GFSC) on 21 November 2016 detailing enforcement action against Marlborough Trust Company Limited (MTCL), its related company Marlborough Nominees Limited (MNL), and four individual directors following an investigation into their administration of asset holding companies (SPVs) owned by the collapsed Arch Guernsey ICC Limited fund (the Arch Cru affair). The Commission found serious and systemic breaches of licensing criteria, including failures of corporate governance, backdated and falsified board minutes, missing investment advisory agreements, reckless false answers to the regulator, and delayed reporting of significant matters.

• Financial penalties: £100,000 imposed on MTCL; £35,000 each on Mr Hannah and Mr Howe (reduced from £50,000 due to financial means); £25,000 on Mr Enevoldsen; £10,000 on Mr Tustin.
• Director/controller prohibitions: Mr Hannah and Mr Howe barred for 5 years, Mr Enevoldsen for 2 years 6 months, from acting as director, controller, partner or manager of any Regulatory Laws licensee.
• Exemption disapplication: The exemption under Section 3(1)(g) of the Fiduciaries Law disapplied for Mr Hannah and Mr Howe (5 years), Mr Enevoldsen (2 years 6 months) and Mr Tustin (2 years).
• Controller objection notices: Notices of objection served under Section 15 of the Fiduciaries Law against Mr Hannah and Mr Howe remaining controllers of MTCL.
• Licence condition: A condition imposed on MTCL's licence under Section 9 of the Fiduciaries Law requiring removal of Mr Hannah and Mr Howe as controllers, and removal of Mr Hannah, Mr Enevoldsen and Mr Howe as directors of MTCL.
• Public Statement: Issued under Section 11C of the Financial Services Commission Law to publicise these findings and sanctions.

The statement is enforcement-specific to the named entities and individuals rather than a general rule change, but it signals the Commission's expectations around board-level record keeping, delegation oversight, investment advisory documentation, and prompt, frank reporting of significant issues by fiduciary licensees generally.

Key obligations

• MTCL must pay a £100,000 financial penalty to the Commission
• Mr Hannah and Mr Howe must each pay a £35,000 financial penalty
• Mr Enevoldsen must pay a £25,000 financial penalty
• Mr Tustin must pay a £10,000 financial penalty
• Mr Hannah and Mr Howe must cease acting as director, controller, partner or manager of any Regulatory Laws licensee for 5 years
• Mr Enevoldsen must cease acting as director, controller, partner or manager of any Regulatory Laws licensee for 2 years and 6 months
• MTCL must remove Mr Hannah and Mr Howe as controllers and remove Mr Hannah, Mr Enevoldsen and Mr Howe as directors of MTCL

Applies to

licensees under the Fiduciaries Law, trust companies, corporate directors, fiduciary sector controllers and managers

Deadlines

• 5 years from 21 November 2016: Prohibition period for Mr Hannah and Mr Howe from performing director/controller/partner/manager functions and disapplication of the Section 3(1)(g) exemption
• 2 years and 6 months from 21 November 2016: Prohibition period for Mr Enevoldsen from performing director/controller/partner/manager functions and disapplication of the Section 3(1)(g) exemption
• 2 years from 21 November 2016: Disapplication of the Section 3(1)(g) exemption for Mr Tustin