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Financial Services
No room for fare-dodgers
From the Financial Times of Fri, 19 Dec 2014 17:27:52 GMT

News flash: the City of London is safe from fare-dodgers.

This week the UK financial watchdog imposed a lifetime industry ban on Jonathan Burrows, who was caught last year by transport inspectors and admitted that he had “on a number of occasions” failed to pay the full £21.50 daily fare for his commute by train into London.

The case has been something of a London cause célèbre, ever since it was first reported that an unnamed City worker had paid a settlement of almost £43,000 to avoid being prosecuted for fare-dodging, and keep his name out of the newspapers.

Southeastern Trains initially honoured the deal, but British Transport Police later began a criminal investigation into the man who had become known as “the biggest fare-dodger in history”.

Mr Burrows was publicly unmasked this summer and stepped down as a managing director at BlackRock Asset Management Investor Services. The Financial Conduct Authority has weighed in, saying he “demonstrated a lack of honesty and integrity” and no longer met the “fit and proper” requirement for working in the industry.

In a statement issued by a PR firm, Mr Burrows apologised, saying: “What I did was wrong, and I accept that.” He then went on, a bit cheekily: “I recognise that the FCA has on its plate more profound wrongdoing than mine in the financial services sector, and I am sorry that my case has taken up its time at this critical juncture.”

At first blush the lifetime ban does seem a bit excessive. Since the financial crisis, only 256 people have faced this kind of formal prohibition, and their ranks do not include many of the bright sparks who drove the banking sector into the ground with dangerously low capital levels and reckless lending and trading policies. Two former senior Northern Rock executives and one from HBOS were fined and barred, but they are very much the exception. Why should Mr Burrows be treated this harshly?

But turn the question around. If Mr Burrows had admitted shoplifting iPads, or holding someone up on a street corner, we would expect him to be banned from managing other people’s money. Stealing rail fares should be no different.

In his statement he said his misconduct had been overstated because he sometimes commuted from a rented London flat. The £43,000 “was significantly in excess of the value of the fares not paid by me on the small number of occasions that I failed to pay”. In any event he had not bought a season ticket since 2008.

Nor is he an isolated case. This year the FCA banned Anthony Verrier, a former interdealer broker, after a judge ruled that he had participated in an illegal employee poaching conspiracy and failed to tell the truth about it during a civil trial. Among other things he testified that he had “lost” seven BlackBerrys while recruiting former co-workers to a new firm. Mr Verrier chose to retire rather than appeal.

In that case FCA enforcement director Tracey McDermott said Mr Verrier “should have been a role model for others. The judge’s findings about his conduct made it clear he fell far short of that.”

Her comments are pretty hokey, but the financial services sector needs to pay them heed. The City has to get the little things right before we can trust it again over the big stuff. There can be no room for fare-dodgers.



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