Judgment summary
This decision follows an earlier First Decision ([2026] UKUT 00162 (TCC)) in which the Tribunal found that Ms Dunne, a pension transfer specialist and appointed representative of Financial Solutions Midhurst Ltd (FSML), had breached Statement of Principle 2 by giving unsuitable pension transfer advice to at least 18% of her clients and had breached Statement of Principle 1 through dishonesty in relation to a backdated AR agreement and certain Confirmation Letters and Advice Declarations (1, 8). Mr Fenech, the owner of FSML, was found to have breached SoP 7 for failing to supervise Ms Dunne and SoP 1 for dishonestly providing a backdated AR agreement, though he was found not to have been reckless (8).
The Authority had imposed Prohibition Orders on both Applicants under FSMA s 56 and penalties under FSMA s 66 of £399,817 on Ms Dunne and £270,646 on Mr Fenech (6, 7). This judgment addresses the Prohibition Orders and the penalties, deferred from the First Hearing (9).
The Tribunal dismissed both references so far as they concerned the Prohibition Orders (11, 60). On penalties, the Authority had already revised its figures by the hearing to £277,087 for Ms Dunne and £106,724 for Mr Fenech, but the Tribunal found these still too high and directed further reductions to £41,230 for Ms Dunne and £16,046 for Mr Fenech (13, 14, 174).
Background
Ms Dunne was a pension transfer specialist and appointed representative (AR) of FSML, an advisory firm owned and operated by Mr Fenech (2). The Authority issued Decision Notices finding that Ms Dunne breached SoP 2 by failing to collect necessary information and giving unsuitable advice in a sample of client files, and breached SoP 1 by being knowingly concerned in providing a dishonest backdated AR agreement (3). Mr Fenech was found by the Authority to have breached SoP 7 by failing to ensure adequate management and oversight of Ms Dunne, and SoP 1 both by recklessness in relation to warnings about Ms Dunne's advice and by deliberately providing the backdated AR agreement (4).
The relevant period for Ms Dunne was 29 April 2015 to 22 June 2017, and for Mr Fenech 3 January 2015 to 22 June 2017 (5). The Authority imposed penalties under s 66 FSMA of £399,817 on Ms Dunne and £270,646 on Mr Fenech, and Prohibition Orders under s 56 FSMA on both (6, 7).
A First Hearing took place in January and February 2026, with judgment published on 27 April 2026 as [2026] UKUT 00162 (TCC) (the First Decision) (8). The Tribunal found both Applicants had dishonestly provided a backdated AR agreement, in breach of SoP 1; that Mr Fenech's dishonesty was a one-off action out of character; that Ms Dunne had also acted dishonestly regarding Confirmation Letters and Advice Declarations; that at least 18% of Ms Dunne's clients received unsuitable advice, with further general compliance failings amounting to a breach of SoP 2; and that Mr Fenech breached SoP 7 through inadequate supervision but was not reckless (8). The parties agreed to defer submissions on Prohibition Orders and penalties until after that decision (9).
Core dispute
The core issues were whether the Tribunal should uphold or remit the Prohibition Orders given that the Tribunal's findings (particularly on recklessness and the extent of unsuitable advice) differed from those underpinning the Authority's original decisions, and if upheld, in what form; and what the appropriate quantum of the financial penalties should be, including questions of disgorgement, hardship, relevant income, seriousness level, mitigating factors, interest, and various computational adjustments (11 to 17).
Ms Dunne sought either a redrafted Prohibition Order incorporating a 'minded to revoke' indication after five years, or alternatively public censure with no penalty, or a reduced penalty taking account of financial hardship, excluded files and other costs (11, 16). Mr Fenech sought remittal of his Prohibition Order on the basis that the Tribunal's findings were significantly at variance with the Authority's reasoning, and argued for a lower Step 2 basis for his penalty, a lower seriousness level, and credit for cooperation (11, 17).
Court findings
The Tribunal held that its jurisdiction on non-disciplinary references (Prohibition Orders) is supervisory rather than a full merits review, under FSMA s 133(6) and (6A), and it would only remit if the Authority's decision would not inevitably be the same in light of the Tribunal's findings (23 to 28, 55, 56).
For Ms Dunne, the Tribunal found the decision to impose a Prohibition Order was plainly within the range of reasonable decisions open to the Authority, given her dishonesty regarding the backdated agreement and the Confirmation Letters/Advice Declarations, and the SoP 2 breach (49). It declined to direct a 'minded to revoke' indication, holding this was not a matter within its remittal powers under s 133(6A) (47).
For Mr Fenech, although the Tribunal's findings on recklessness and the extent of unsuitable advice were 'clearly at variance' with some factors relied on by the Authority, it found that remitting the decision would inevitably lead to the same outcome, given his dishonesty regarding the backdated AR agreement and other regulatory factors (55 to 58). The Tribunal therefore declined to remit his Prohibition Order.
On penalties, the Tribunal rejected Mr Cherry's submission that public censure was sufficient for Ms Dunne, applying the DEPP 6.4.2G criteria and finding the dishonesty findings and unsuitable advice placed her conduct at the more serious end (72 to 86). It held that disgorgement should not be reduced or waived due to Ms Dunne's financial hardship, following established authority that disgorgement is not punitive (105 to 112). It reduced the Step 1 disgorgement basis for both Applicants to 18% of relevant benefits, reflecting the finding that at least 18% of clients received unsuitable advice, rejecting the Authority's submission that all benefits should be disgorged due to systemic Suitability Report failings (121 to 128, 146). It declined to charge interest on the disgorgement amounts due to unexplained delays by the Authority and the fact that the significant interest rate rises occurred in the later years (131 to 144).
For Mr Fenech's Step 2 calculation, the Tribunal held that his 'relevant income' should be based on his income from the AR agreement with Ms Dunne (£36,269), not his total income from FSML, because the AR arrangement was a separate workstream (149 to 160). It assessed the seriousness of his breach at Level 4 (30%), rejecting arguments for a lower level, and declined to reduce the penalty for mitigation, given his denials during interviews and failure to remedy compliance failures before Authority involvement (163 to 171). It found the resulting penalty sufficient for deterrence at Step 4 (172, 173).
Outcome
The Tribunal dismissed both References insofar as they related to the Prohibition Orders, upholding them (60, 174(1)).
The Tribunal determined that the appropriate penalty for Ms Dunne should be reduced to £41,230 and for Mr Fenech to £16,046, finding these penalties proportionate to the breaches (174(2), 175). The Decision Notices were remitted to the Authority to give effect to this determination, which was unanimous (175).
Major issues / areas of contention
- Whether the Prohibition Orders should be upheld or remitted given that the Tribunal's findings differed from those underlying the Authority's original decisions, particularly on recklessness (Mr Fenech) and the extent of unsuitable advice (Ms Dunne).
- Whether the Tribunal has jurisdiction to direct that a Prohibition Order include a 'minded to revoke' indication after a specified period.
- Whether public censure was a sufficient sanction for Ms Dunne instead of a financial penalty, applying the DEPP 6.4.2G criteria.
- Whether Ms Dunne should be required to disgorge profits despite the Authority's acceptance that she would suffer serious financial hardship.
- What percentage of benefits received should be disgorged, given the finding that at least 18% of Ms Dunne's clients received unsuitable advice versus the Authority's position that all benefits should be disgorged due to systemic failings in Suitability Reports.
- Whether interest should be charged on the disgorgement amount, given unexplained delays in the Authority's investigation and enforcement process.
- What should constitute Mr Fenech's 'relevant income' for Step 2 of the penalty calculation: his total income from FSML or only that derived from the AR agreement with Ms Dunne.
- What level of seriousness (Level 4 or otherwise) should apply to Mr Fenech's breach under the DEPP Step 2 framework.
- Whether mitigating factors, including Mr Fenech's cooperation and unblemished record, should reduce the penalty at Step 3.