The Upper Tribunal has upheld the FCA’s decision to prohibit Arif Hussein, a former trader, on the basis that he failed to be candid and truthful during the enforcement process. In the decision, the Tribunal was critical of the FCA’s focus on the relatively junior trader, who was put under investigation in relation to a limited number of chats which took place over a short period when there was widespread manipulation of LIBOR within the bank.

Arif Hussein v The Financial Conduct Authority, 20 June 2018


In January 2016, the FCA issued a Decision Notice against Mr Hussein prohibiting him from performing any function in relation to any regulated activity, as the FCA considered he lacked integrity. It found that in the last two months of his employment as a derivatives trader in sterling denominated instruments, Mr Hussein engaged in internal chats with a Trader-Submitter knowing that it was improper to participate in conduct intended to influence the bank’s LIBOR submissions. The RDC found Mr Hussein was not dishonest but acted recklessly and lacked integrity. Mr Hussein challenged the FCA’s decision and the case was referred to the Upper Tribunal.


The Tribunal concluded that there was no basis on which it could ask the FCA to reconsider the prohibition order against Mr Hussein. The Tribunal did however offer different analysis to the FCA in reaching this conclusion. The Tribunal found that Mr Hussein had not acted dishonestly or without integrity. However, the prohibition order was justified because he failed to be candid and truthful with the FCA during the enforcement process.

The Tribunal considered two main issues. The first was whether Mr Hussein acted dishonestly and without integrity when he entered into the online chats with Trader-Submitters. This rested on what factors Mr Hussein believed fell into the scope of what could be properly taken into account in making a LIBOR submission and the way in which he believed his information would be used by the Trader-Submitters in determining the bank’s LIBOR submissions.

The Tribunal did not consider Mr Hussein to have acted dishonestly or recklessly with regard to the chats he had with Trader-Submitters. Amongst other things, the Tribunal found that the chats took place in the context of no formal procedures within the bank as regards the LIBOR submission process and that Mr Hussain’s knowledge of the process came through informal training and his own research. Mr Hussein believed that the extent to which it was proper for his information to be taken into account would be the subject of relevant compliance procedures which the Trader-Submitters were required to follow.

The second issue was whether Mr Hussein made false or misleading statements to the FCA before the making of his reference and whether he made such statements to the Tribunal in his evidence. The Tribunal found that the case Mr Hussein advanced before it was substantially different to that which he maintained before the RDC and was partially inconsistent with the answers he gave to the FCA during his interview before regulatory proceedings. The Tribunal did not accept Mr Hussein’s explanation for his change of position and found that Mr Hussein misled the FCA during interview. The Tribunal stated that the Applicant was “economical with the truth” rather than guilty of deliberately giving false answers: “his sin was one of omission.”

Notably, although agreeing with the prohibition, in the circumstances the Tribunal was critical of the FCA’s focus on a relatively junior trader. The Tribunal highlighted that Mr Hussein was put under investigation in relation to a limited number of chats which took place over a short period and was concerned by Counsel for the FCA’s observations that “as regards more senior people… not everybody is in the jurisdiction” and that “the senior people somehow manage to keep their fingerprints off the relevant documents sometimes”. The Tribunal expressed hope that this was not indicative of the FCA’s wider attitude to pursuing senior management either in this jurisdiction or elsewhere when it is necessary to do so.


This case provides a clear warning against misleading the FCA during the enforcement process. The Tribunal’s criticism of the FCA’s enforcement focus here is likely to be of great frustration to the FCA which is seeking to promote culture change and senior management accountability. The FCA has said that generally where there are grounds for investigating a matter, there will now be a need to investigate the role of senior management in the conduct issues that arise and the Tribunal’s comments in this case are only likely to make the FCA even more determined to hold relevant senior managers to account where regulatory breaches are identified.