GFSC response to Providence Court of Appeal judgment

The Guernsey Financial Services Commission (the GFSC) has welcomed the Court of Appeal judgment relating to the long-running Providence enforcement procedure. This judgment confirms several key findings of wrongdoing originally made by the GFSC’s Senior Decision Maker and enables the GFSC to publish those findings for the first time.

Background:

 

This case relates to a fraudulent Ponzi scheme operated by Providence in the mid-2010s. The GFSC has worked closely with the U.S. Securities and Exchange Commission (SEC) over the past decade to address the failings within the Providence entities. Several former directors are currently serving prison sentences in the United States.

Key points:

 

• Wrongdoing confirmed: The Court of Appeal has placed several previously disputed instances of misconduct into the public domain, confirming the GFSC’s original findings
  
   
• Process endorsed: The judgment supports the GFSC’s enforcement process and upholds the reasoning of its Senior Decision Maker, despite challenges from multiple parties
  
   
• Further legal steps: The Royal Court has been asked to reconsider certain matters, and the GFSC may be required to undertake further work depending on the outcome
  
   
• Guidance for directors: The judgment offers practical insights into acceptable and unacceptable conduct for company directors operating under pressure
  
   
• Human rights compliance: The Court of Appeal has confirmed that the GFSC’s enforcement procedures comply with Article 6 of the European Convention on Human Rights

Commission’s position:

 

While acknowledging the time it has taken to reach this point, the GFSC continues to view the enforcement process as essential to exposing serious misconduct. The GFSC notes that no supervisory regime system can be entirely fool proof against individuals intent on criminal activity, however, it remains committed to engaging with individuals on the assumption that they act with honesty and integrity.

Our key takeaways from the Court of Appeal judgment can be found here.