15 December 2014
David Corker’s comments re BlackRock and the FCA published in Bloomberg
Ex-BlackRock Managing Director Banned for Evading Rail Fares
A former managing director at BlackRock Asset Management Investor Services Ltd. was banned from working in the industry after evading tens of thousands of pounds in train fares for his daily commute.
The U.K. Financial Conduct Authority banned Jonathan Burrows from performing any function in relation to any regulated activities in financial services because his actions are not “fit and proper behavior for an approved person,” the regulator said in a statement today.
On Nov. 19, 2013, Burrows was stopped by a transport officer at the exit gates of London’s Cannon Street station after failing to purchase a valid ticket for his entire journey. The former money manager used his London travel card to exit the station, paying a maximum fare of 7.20 pounds rather than the 21.50 pounds he was due to pay. Burrows agreed to pay about 43,000 pounds ($67,300) to London & South Eastern Railway Ltd. for unpaid fares, according to a company spokeswoman, and left his job at BlackRock.
Burrows said in an e-mailed statement today that he had been “foolish” and that he regretted his decision after a “20-year career in the City that was without blemish.” BlackRock, the world’s biggest money manager, said in an e-mailed statement that Burrows’s conduct was contrary to the firm’s values and principles.
Burrows had told the FCA that he failed to pay the correct train fare a number of times and was aware he had been breaking the law.
“Approved persons must act with honesty and integrity at all times and, where they do not, we will take action,” said Tracey McDermott, the FCA’s director of enforcement and financial crime.
The FCA is raising the standards it expects of individuals as the industry seeks to rebuild trust after scandals that have ranged from mis-selling to market rigging. The regulator was embarrassed earlier this year when it emerged Paul Flowers, the former chairman of Co-Operative Bank Plc charged with drug possession this year, had been granted approval to work in the industry even though he already had a conviction.
“The FCA is attempting to bring the level of accountability of approved persons up to a similar level as lawyers and accountants,” said David Corker, a London-based lawyer specializing in criminal and regulatory investigations. “It’s about protecting the profession’s reputation.”
The train company has about 500 reports of fare evasion every month, of which about 400 are prosecuted, with less than a fifth settled out of court, Southeastern said in a statement. The maximum penalty for traveling without a valid ticket and refusing to pay the penalty fare that applies is a 1,000-pound fine, a three-month prison sentence, or both.