Reducing the risk to local investors is one of our key responsibilities and we care very much that the Jersey public understands the potential risks, as well as the opportunities, involved in making investment decisions.
Our work to educate the public and enforce compliance with our regulatory regime increased in 2020 as we handled the most enforcement cases in our 22-year history.
Raising awareness during uncertainty
In times of economic uncertainty, such as Covid-19 or the financial crash of 2007/8, we do unfortunately see trends of increases in fraud, scams and poor professional conduct within the finance industry. By regularly raising awareness, we endeavour to make sure members of the public are fully informed before they part with their money. It is impossible for any regulator to prevent every single case of investors losing their savings, but we can and do regularly highlight the risks.
Throughout 2020, we shared warnings about Covid-19-related scams through our work as a member of the Jersey Fraud Prevention Forum. Collaborating with other local agencies, we delivered two targeted public awareness campaigns with newsletters sent to all Island homes, radio commercials, webinars and social media video messages specifically focusing on what residents should do to stay alert and protect themselves while at home during lockdown. As a result, we witnessed a 144% spike in visits to the Forum’s website during the year.
We also took part in the fourth World Investor Week, a global public awareness initiative supported by more than 90 jurisdictions, which promotes investor education and protection. Tailoring our campaign to warn Islanders to be cautious when considering making or changing investments during the uncertain economic climate, we shared educational videos and information on our website, social media channels and in the local media. All our activities were designed to re-emphasise the basics of investing and to educate Islanders about mis-selling, financial grooming and virtual currencies.
Taking action against misconduct
During 2020, we identified several instances of scam activity and unauthorised businesses operating in the Island. We issued various warnings to the public.
The number of suspicious activity reports we handled during the year increased by a quarter, compared to 2019. This crucial intelligence received mainly from the States of Jersey Police's Joint Financial Crimes Unit helps us to take action against compliance failings in our regulated community and therefore protect the public.
In June, we imposed our second civil financial penalty. The £115,575 fine was for local trust company business Equity Trust Limited, which negligently breached our Codes. The business agreed to settle with us, consequently qualifying for a reduced penalty.
In September, we published the conclusions of our investigation into Lumiere Wealth Limited, the Jersey-based financial services business that went into liquidation in October 2016 with millions of pounds of investor losses. Our investigation was put on hold while the criminal investigation and subsequent trial of the business’ former managing director were concluded. We assisted Jersey law enforcement agencies with the criminal case and engaged with investors about the findings of our own case.
