Richard Brian Fenech and Heather Imogen Dunne v The Financial Conduct Authority

In Richard Brian Fenech and Heather Imogen Dunne v The Financial Conduct Authority, the Upper Tribunal considered the calculation of penalties imposed on two individuals, Ms Dunne and Mr Fenech. 

Background

In 2024 the FCA issued decision notices in which it proposed to fine and ban Ms Dunne, a pension transfer specialist and appointed representative (“AR”) of Financial Solutions Midhurst Ltd (“FSML”), and Mr Fenech, the owner and operator of FSML, for various breaches of the FCA’s Statements of Principle (“SoP”) between 2015-2017.

A first Upper Tribunal hearing took place with respect to the breaches themselves in early 2026. The Tribunal largely upheld the FCA’s conclusions with respect to the breaches, although its reasoning differed. The Upper Tribunal found that SoP1 (the need to act with integrity), was breached by both applicants when they provided the FCA with a backdated AR agreement, and in Ms Dunne’s case, by providing documents to defined benefit schemes beneficiaries before Suitability Reports were issued. Ms Dunne was also found to have breached SoP2 (due care, skill and diligence) following general compliance failures, with the Tribunal concluding that at least 18% of her clients received unsuitable advice. Mr Fenech was deemed to have breached SoP7 (compliance with regulatory standards) by failing to adequately supervise Ms Dunne.

This decision follows a second hearing in July 2026 to consider submissions on the penalties imposed under the original Decision Notices (in addition to the proposed Prohibition Orders). The FCA intended to impose Prohibition orders on both parties and to fine Ms Dunne £399,817 and Mr Fenech £270,646.

The Tribunal’s decision

Prohibition Orders

The Upper Tribunal did not remit the Prohibition Orders imposed on both Ms Dunne and Mr Fenech back to the FCA for reconsideration (this being the limit of its power in connection with referrals on supervisory matters). In the case of Ms Dunne, the Upper Tribunal found that it did not have the power to adjust the language of the FCA’s Prohibition Order (as she had requested), noting established case law confirming that this was exclusively within the FCA’s remit.

With respect to Mr Fenech, the Upper Tribunal concluded that, although it had made substantially different findings on breach to the FCA during the first hearing, the FCA’s decision to prohibit would ‘inevitably have been the same’. The Tribunal applied the guidance in ENFG 5.3.2G in reaching this conclusion. Significant weight was placed on the conclusion that he had acted dishonestly, which the Tribunal agreed outweighed the one-off nature of Mr Fenech’s action.

Fines

The FCA accepted it had miscalculated the income and benefits received by each individual and was prepared to reduce the interest applied from an initial rate of 8% to one equal to the Bank of England base rate. The Upper Tribunal ultimately decided to go further, significantly reducing the fines imposed on both individuals.

Ms Dunne

The Upper Tribunal disagreed with the FCA’s view on disgorgement (step one of the penalty calculation). The FCA had argued that Ms Dunne should disgorge all the benefits of her pension transfer work due to the systemic errors in her Suitability Reports. However, the Upper Tribunal found that the breach of a regulatory rule did not automatically mean that disgorgement was proportionate or appropriate on the facts. Disgorgement must be assessed in direct relation to the wrongdoing identified, rather than evaluated on the basis of the hypothetical effects of such wrongdoing (as the FCA had attempted to do). The Upper Tribunal decided that 18% was the correct disgorgement figure, in light of its earlier factual finding that 18% of Ms Dunne’s clients had received unsuitable advice. 

The Upper Tribunal also found it was not in the interests of justice to apply interest to disgorgement here, given the multiple unexplained periods of procedural delay and material interest rate increases in recent years (which meant that lower rates would have applied had the FCA pursued its investigation more swiftly). It considered that this was within the range of reasonable interpretations of the relevant provisions in DEPP, which the Tribunal has maintained in earlier cases are to be applied flexibly. 

Ms Dunne’s fine was calculated as 18% of the agreed starting point of £229,055, i.e. £41,230. Steps two to five of the penalty calculation were not applied due to Ms Dunne’s serious financial hardship.

Mr Fenech

The reduction in Mr Fenech’s fine stemmed from The Tribunal’s interpretation of his “relevant income” and the seriousness of his breach at step two of the penalty calculation.  The appropriate “relevant income” was said to be that which Mr Fenech derived from the work carried out for FSML by Ms Dunne as its AR during the relevant period, not (as the FCA had argued) Mr Fenech’s entire income from FSML during the relevant period (which had led to a higher starting point in its decision notice). The Tribunal concluded that Mr Fenech’s position was more analogous to that of a firm rather than an employee; while remuneration is the basis on which employee “relevant income” is based (DEPP 6.5B), the approach for firms focuses on a percentage of the revenue from the specific product line or business area relevant to the breach (DEPP 6.5A). Despite acknowledging that there was not an exact parallel, the Tribunal found that his income came from running FSML, and that the greater part of this derived from workstreams separate to the AR agreement with Ms Dunne. That meant his position was closer to that of a firm with distinct workstreams than it was to a salaried employee. Any concern that the resulting figure was insufficient to be an appropriate deterrent could be dealt with at step four, rather than allowed to distort this element of the penalty calculation. 

The Upper Tribunal rejected an argument that Mr Fenech’s attendance at interviews, timely responses and general responsive manner constituted mitigating factors; this was outweighed by his denial of negligence and dishonesty and failure to take steps to remedy compliance failures prior to the FCA’s involvement. 

The Upper Tribunal proactively considered an adjustment for deterrence at step four, given its reduction of the step two figure from that in the FCA’s decision notice and the lower figure for which the FCA argued in this hearing. However, it concluded that the resulting figure of £16,046 was sufficient to deter Mr Fenech (given the evidence of his “financially perilous position”) and to deter others.

Key Takeaways

• The Tribunal concluded that disgorgement should be proportionate, tracking established wrongdoing, rather than broadly encompassing the full revenue from the relevant business line. This is likely to be particularly helpful in cases where wrongdoing is quantified, meaning it can be reflected in the percentage applied to a person or firm’s overall profit in the context of disgorgement.

• The decision that interest on disgorgement should not apply due to FCA procedural delays and the corresponding impact of rising interest rates is notable. Whilst the FCA has made much of its efforts to reduce the duration of its investigations, where delays do occur, this decision provides some authority to argue that the impact of this on any interest applied should be considered. 

• The decision also demonstrates the practical impact of the Tribunal’s assertion in Staley v FCA that “the provisions of DEPP must be applied flexibly according to the circumstances of the case”. The Tribunal gave itself latitude in this case to find that Mr Fenech’s income was better understood as analogous to that of a firm rather than an individual (resulting in a lower step two figure). This may be beneficial to those referring decisions to the Tribunal, opening up the possibility of advancing the argument that DEPP’s standard categories and guidance do not neatly map onto the facts of their particular case. The Tribunal remains willing to deviate from guidance where it deems that this would not produce a justifiable outcome in the circumstances.

• Evidence of dishonesty is likely to weigh heavily against an individual or senior manager in the eyes of the Tribunal and FCA, even if this was an isolated incident.

The FCA press release, published on 4 August 2026, can be found here.

The Tribunal judgment can be found here.