FCA under further pressure as Letter Before Action begins legal action

Non-executive directors at the Financial Conduct Authority have found themselves under fire once again, with the board receiving an open letter accusing them of failure to act and the regulator itself now in receipt of a Letter Before Action.

Andy Agathangelou, founder of the Transparency Task Force, has published the open letter calling for the non-executive directors and outgoing chair Charles Randell to "provide an explanation as to why [they] are failing to act upon the findings" of the independent investigation into the FSA/FCA IRHP Review scheme.

The letter presumes that the regulatory board must have been "sufficiently concerned by the widespread backlash and complaints in respect to the IRHP Review" to order the investigation initially.

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Agathangelou goes on to argue that it is "a concern" the regulator is "seeking to ignore [John] Swift's findings on the issue", following his investigation.

He adds that it is "perhaps of greater concern" that Randell and the FCA NEDs have "either chosen to ignore the findings and/or support the FCA's position and efforts to ignore those findings".

Agathangelou said: "There is also the issue of that lack of moral hazard that these repeated failures represent, and only serve to encourage or facilitate further wrongdoing and further oversight failures."

The open letter is "directly connected" to the Letter Before Action submitted to the FCA by Hausfeld on behalf of the All-Party Parliamentary Group on Fair Business Banking, which marks the first formal legal step against the regulator.

This action is centred around the APPG seeking to challenge the lawfulness of the FCA's decision to take no further action in relation to IRHP mis-selling or require any further redress to be paid to affected customers.

APPG wrote to the regulator on 14 January 2022 requesting the decision to be revisited, which was declined by the FCA on 31 January 2022, a decision it believes to be unlawful.