Appeal against GFSC sanctions gets rejected
AN APPEAL by a company director against sanctions imposed by the Guernsey Financial Services Commission has been rejected by the Royal Court.
Fund manager Nicholas Hofgren was sanctioned by the commission in November 2022, claiming that he had failed to meet ‘aspects of the minimum criteria for licensing’.
As a result he was prohibited from holding senior positions in any licensed Guernsey company for 14 years.
A fine of £290,000 would also have been imposed ‘but for his impecunious circumstances’, said the court judgment in summing up the sanctions, and also because this would have diluted funds which may have been available to creditors.
Mr Hofgren was beneficial owner and an executive director of fund manager GFG Ltd. At the time of the GFSC decision the company was in liquidation but sanctions were also imposed on it.
The GFSC’s actions involved Mr Hofgren’s involvement with various loans from companies connected to GFG, allegations that he misled the commission and his fellow directors, put the reputation of the Bailiwick at risk’ and allowed a third party to ‘gain great control of GFG’.
Mr Hofgren appealed against all of the sanctions imposed upon him.
His claim was that the decision of the GFSC was unreasonable and/or included factual and legal errors. In addition, he said that the action against him was disproportionate compared to previous cases, and also to those imposed on others involved in the same ‘alleged contraventions’.
His advocate submitted that the terms of the original decision by the senior decision maker from the GFSC were incomplete and unclear.
Lt-Bailiff Hazel Marshall, presiding in the ordinary division of the court, said that the sanctions imposed on Mr Hofgren were ‘on any basis, severe’.
But she concluded that his conduct had been ‘very serious’, as stated by the commission.
She said that she found the 14-year prohibition order severe, particularly since Mr Hofgren was 52 at the time it was imposed and so it would, in effect, be career-ending.
However, she did not consider it so extreme as to be unreasonable or disproportionate.
Dismissing the appeal, she concluded that none of the grounds put forward succeeded, ‘at any rate sufficiently to justify that the sanctions imposed upon him in this case should be set aside’.
The GFSC said it welcomed the judgment and would issue a public statement in respect of Mr Hofgren in due course.
