Trevor Kelham v Chairman of the Guernsey Financial Services Commission

Summary

This is a Royal Court of Guernsey judgment (handed down 18 April 2023) on an appeal by Trevor Kelham, former Managing Director and CEO of Standard Chartered Trust (Guernsey) Limited (SCTG), against enforcement sanctions imposed by the GFSC's Senior Decision Maker in April 2021 for AML/CFT and governance failings connected to the transfer of client trust assets out of the jurisdiction between 2012 and 2016.

• Sanctions under appeal: A four year prohibition order, application of a licensing exemption for four years, a £45,000 fine, and a public statement, originally imposed under the Fiduciaries Law, POI Law, Insurance Business Law, IMII Law, Banking Law and FSC Law, treated on appeal as governed by the Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020.
• Grounds of appeal: The Appellant argued the Decision was based on material errors of fact and procedure and was unreasonable, including in the Wednesbury sense, and sought to have all sanctions set aside or reduced.
• Outcome: The Court dismissed the appeal on nearly all grounds, upholding the prohibition order, exemption, fine and public statement as rational, reasonable and proportionate, save for a narrow finding that the Appellant did not breach Rule 27, which the Court held did not materially undermine the SDM's overall conclusions or the sanctions imposed.

The judgment is primarily of interest as a precedent on the scope and intensity of review under the FSB 2020 Law appeal regime, on directors' and CEOs' AML/CFT and governance responsibilities in bank led fiduciary structures, and on the GFSC's approach to public statements as a regulatory tool. It does not itself impose new ongoing regulatory requirements on the wider industry.

Key obligations

• Any applications arising from the judgment must be lodged within 28 days of the formal handing down of the judgment (applicable to the parties to this specific appeal)

Applies to

fiduciary licensees, trust companies, directors and controllers of licensees, money laundering reporting officers

Deadlines

• within 28 days of the formal handing down of this judgment: Deadline for any applications arising from the judgment to be lodged with the Royal Court