Louvre Fund Services and four directors fined more than £200,000

Two former fund directors have also been banned from working as directors, controllers, partners or managers of a regulated entity.

The GFSC found that the company failed to administer certain funds correctly and also administered an investment scheme that it was unfamiliar with and was outside the Bailiwick.

The licensee, Louvre, was fined £77,000 for the failings. Managing director Kevin Gilligan and directors Charles Tracy, Derek Baudains and Julian Lane were fined £52,500, £31,500, £28,000 and £14,000 respectively.

Mr Gilligan was banned from senior roles in a regulated entity for six years and two months, while Mr Tracy has been banned for three years and six months.

‘The commission considered it reasonable and necessary to make these decisions, having concluded that the licensee and the directors had failed to ensure compliance with the regulatory requirements, and the minimum criteria for licensing set out in schedule one of the fiduciaries law and schedule four of the POI [Protection of Investors] Law,’ the GFSC said.

Aggravating factors in the GFSC’s eyes were the fact that failures of the licensee and directors had a detrimental effect on clients and investors and exposed the company and Bailiwick to a significant risk of reputational damage.

Their failure to ensure that it had adequate policies, procedures and controls in place, as required by regulation, also resulted in the firm being vulnerable to the threat of money laundering and terrorist financing.

The company was established in 2000, with the aim establishing and administering investment funds.

The GFSC launched its investigation in 2017, which was when evidence of the failings were found.

One example given was that Mr Gilligan and Mr Tracy were directors on the board of a scheme. But neither the licensee, nor Mr Gilligan, nor Mr Tracy were able to demonstrate satisfactory documentary proof of ownership for the assets of the scheme, the exact location of all of these assets or satisfactory documentary proof of the exact number of assets acquired.

‘The commission determined that the information gaps mentioned above resulted from the fact that reports from the investment adviser were predominantly verbal and often lacking in granular detail, and as such, the flow of information necessary to properly administer the scheme was insufficient,’ the GFSC said in its report.

‘Therefore, the licensee was unable to consistently value the assets in accordance with the principal documents and information particulars.’

Another example, when Mr Gilligan was a director of the investment manager of a scheme and Mr Tracy and Mr Baudains were directors, saw the licensee administering an investment scheme, which held high value natural resources, with which it was unfamiliar.

These sorts of goods are normally specially traded and that requires careful scrutiny. Serious compliance failings were later found.

Mr Gilligan had been a director since August 2008 and managing director since January 2011.

Mr Tracy was a director and the compliance officer of the licensee between August 2003 and December 2016.

Mr Baudains has been a director of the licensee since July 2000.

Mr Lane has been a director since October 2011 and was the money laundering reporting officer between February 2012 and March 2017.

The GFSC did accept that the licensee initiated a comprehensive review of all of its procedures, before the commission’s investigation commenced.

‘This identified the need to undertake an extensive remediation programme, requiring the significant input of the licensee and the directors,’ the report said.

The licensee and the directors fully co-operated with the commission and the inspectors and agreed to settle at an early stage of the process.

The company, Mr Gilligan and Mr Tracy had been fined by the GFSC in 2016, after they failed to act in accordance with the minimum criteria for licensing under the Protection of Investors Law.