Mr Arnold Eber (Mr Eber), the majority shareholder and sole director of CIB Partners Limited (CIB), a corporate finance consultancy, has had his approval withdrawn to perform the controlled functions CF1 (Director), CF3 (Chief Executive), CF10 (Compliance Oversight), CF11 (Money Laundering Reporting) and CF30 (Customer) at CIB. He has also been prohibited from performing any function in relation to any regulated activity and has been publicly censured as a result of his conduct as an approved person, Chief Executive Officer and sole director of CIB between 5 September 2007 and 15 September 2010 (the Relevant Period).
Between September 2007 and mid-2009, CIB was the adviser to SLS Capital S.A. (SLS), a special purpose vehicle that issued approximately $250 million of bonds in 2005. CIB was engaged by SLS to perform a number of advisory functions, the most important of which was the calculation of the Required Asset Cover (RAC), which indicated the level of assets held within a portfolio of investments, and the issue of a certificate that set out the level of the RAC. Mr Eber was in charge of the overall operation of CIB, and was personally responsible for the performance of CIB as the adviser to SLS.
During the Relevant Period, the FCA found that Mr Eber’s conduct did not demonstrate him to be a fit and proper person to hold controlled functions. The FCA considered that Mr Eber demonstrated a lack of integrity in knowingly causing CIB to issue inaccurate and misleading (and in two instances, false) RAC certificates and misleading (and in two instances, false) reports which appeared to support and add credence to the previously issued RAC certificates, and which were backdated. Mr Eber knew that the reports could be used by third parties for internal compliance. The FCA also found Mr Eber not to be candid and truthful in all his dealings with the FCA, by failing to disclose his knowledge that the SLS portfolio had severe liquidity issues that had led SLS to sell most of the assets that underpinned the SLS bonds by August 2008, and CIB’s provision of a false report in January 2009 to a third party knowing that the document could be given to the FCA.
The FCA considered these failings to be particularly serious because the RAC certificates were relied on by third parties as giving some assurance that sufficient asset cover was in place in respect of the SLS bonds.
As the sole director during the Relevant Period and also being responsible for compliance oversight, Mr Eber was responsible for ensuring such matters were disclosed to the FCA. He failed to do so. Mr Eber knew, or ought to have known, that these were material matters and was information of which the FCA would reasonably expect notice. Mr Eber was aware that he alone was responsible for raising these concerns with the FCA and that no-one else at CIB had done so.
The FCA has had regard to the guidance in Chapter 9 of the Enforcement Guide in deciding that it is appropriate to make a prohibition order in this case.
View FCA Final Notice 2014: Arnold Gary Eber, 24 February 2014