Prohibition Notices

The Prohibition Notice (PDF) issued after Mr Ryan signed a Statement of Undisputed Facts, in which he accepted that he had facilitated an undocumented practice during his time at RSAII, which resulted in a significant shortfall in the firm’s reserves in 2013. Further, he also accepted that during a fitness and probity assessment at EID in 2016, Mr Ryan failed to provide material information and gave false and / or misleading information.

The Prohibition Notice issued to Mr Ryan prohibits him from carrying out any controlled functions, including pre-approval controlled functions, in any regulated financial service provider for a period of 5 years.

Seána Cunningham, Director of Enforcement and Anti-Money Laundering said:

"Regulated firms, and their management, have first line responsibility under the Fitness and Probity Regime, acting as a gatekeeper to the industry by ensuring people subject to the regime are fit and proper. Information provided by persons seeking to perform controlled functions during assessments of their fitness and probity must be complete and accurate.

Persons performing controlled functions must act with honesty and integrity, in accordance with the applicable standards of fitness and probity. Where an individual is suspected to have failed to meet these standards, the Central Bank may use its statutory powers to investigate. If warranted, the Central Bank will prohibit an individual from performing controlled functions in order to uphold public trust and confidence in the financial system and protect users of financial services.”

Additional Information

1. The Fitness and Probity Regime was introduced by the Central Bank under the Central Bank Reform Act 2010 to ensure that regulated firms and individuals who work in these firms are committed to high standards of competence, integrity and honesty and are held to account when they fall below these standards. View further detail on the Fitness and Probity Regime, including the Fitness and Probity Standards.

2. Assessments of an individual’s fitness and probity to perform a controlled functions are conducted by the relevant Regulated Financial Services Provider (RFSP), with the Central Bank acting as a gatekeeper to certain senior roles called “pre-approval controlled functions” or “PCFs”, as firms may not appoint individuals to these roles without the Central Bank’s prior approval in writing.
3. The Central Bank may investigate individuals in controlled functions, including pre-approval controlled functions, if we suspect that they do not have the required fitness and / or probity to perform the role, and we may prohibit them following such investigation, if appropriate.

The prohibition arises from the Central Bank’s investigation into Mr. Cumiskey. This investigation established that between January 2018 and August 2018, Mr Cumiskey induced persons to give him deposits they had saved for a mortgage on the basis that he required the deposit to process mortgage applications on their behalf. Although neither Mr Cumiskey nor his firm (European Mortgage Call Centre Limited) were authorised as a mortgage intermediary, the firm’s website prominently advertised mortgage services.

When the Central Bank was alerted in January 2019, it took immediate steps to suspend Mr. Cumiskey from performing any controlled function. The High Court extended this suspension on 13 May 2019. The Central Bank’s investigation also found that Mr. Cumiskey had outstanding debts and was not managing his own financial affairs in a sound and prudent manner as required by the Fitness and Probity Standards, which all controlled function holders must adhere to.

The Prohibition Notice prohibits Mr Cumiskey from carrying out any controlled functions, including pre-approval controlled functions, in any regulated financial service provider for an indefinite period.

Seána Cunningham, Director of Enforcement and Anti-Money Laundering, said

“The Central Bank’s Fitness and Probity Regime works to ensure that persons holding key and customer facing positions in financial services are committed to high standards of competence, integrity and honesty. The regime sets out the fitness and probity standards that people holding these positions must comply with.

When the Central Bank is investigating a person’s fitness and probity and considers, at any point, that there is a significant need to protect the users of financial services and financial stability, it has the power to issue a suspension notice. This is an important power, which can be used by the Central Bank in seeking to protect consumers from potential harm.

The prohibition of persons from holding key functions in regulated firms where they fail to meet the required standards of fitness and probity upholds public trust and confidence in the financial system. The Central Bank continues to highlight to financial services firms, and to those holding key positions in these firms, the importance of meeting the requirements and standards under the Fitness and Probity Regime.”

Additional information

1. The Prohibition Notice was effective from 16 July 2020 and is issued for an indefinite period. This is the ninth prohibition notice issued by the Central Bank pursuant to the Fitness and Probity Regime.
2. As is the practice of the Central Bank no further information can be provided whilst a current Garda Síochána investigation is in being.
3. The Fitness and Probity Regime was introduced by the Central Bank under the Central Bank Reform Act 2010 to ensure that regulated firms and individuals who work in these firms are committed to high standards of competence, integrity and honesty and are held to account when they fall below these standards.
4. The Central Bank acts as a gatekeeper to certain senior roles called “pre-approval controlled functions” or “PCFs” and it may assess the fitness and probity of the individuals proposed for these roles. Firms may not appoint individuals to these roles without the Central Bank’s approval in writing. We may also investigate individuals in key roles, namely those performing “controlled functions” including PCFs, if we suspect their fitness and probity to perform their role and we may prohibit them if appropriate.
5. The Fitness and Probity regime also imposes significant obligations on Firms. The Central Bank issued letters to all regulated firms on 8 April 2019 and 17 November 2020, reminding them of their compliance obligations under the Fitness and Probity Regime. The first letter, highlighted areas where we have detected compliance to be lacking. The most recent letter was issued following thematic inspections of firms which revealed common issues and shortcomings in their implementation of the Fitness and Probity Regime and set out our expectations for firms to take appropriate action to address the significant issues identified. We have taken enforcement action against firms, leading to monetary penalties, for failing to have proper systems and controls in compliance with the Fitness and Probity Regime.
6. View further detail on the Fitness and Probity Regime, including the Fitness and Probity Standards.

The Prohibition Notice (PDF) arose following an investigation by the Central Bank which found Mr von Geitz provided misleading answers to the Central Bank when he made an application for a pre-approval controlled function (PCF) position in The Mortgage Department Limited. Mr. von Geitz also failed to cooperate with the investigation subsequently conducted by the Central Bank. The prohibition imposed reflects the seriousness with which the Central Bank views Mr. von Geitz’s conduct.

Seana Cunningham, Director of Enforcement and Anti-Money Laundering said:

“The Central Bank’s Fitness and Probity Regime seeks to ensure that regulated firms and individuals who work in these firms are committed to high standards of competence, integrity and honesty and are held to account when they fall below these standards. The Central Bank acts as gatekeeper to certain senior roles called “pre-approval controlled functions” and may assess the fitness and probity of individuals proposed for these roles through the gatekeeper process. Individuals may not be appointed to these roles without the prior written approval of the Central Bank.

The Central Bank requires all applicants to engage fully and with absolute candour and honesty throughout the gatekeeper process so that we can conduct a proper assessment. Where we find that individuals have provided false and/or misleading information to the Central Bank we will investigate pursuant to our statutory powers.

We would take this opportunity to remind those who hold controlled functions of the positive obligation on them to cooperate with Central Bank investigations, whether under the Fitness and Probity Regime, or our other enforcement processes.”

Additional information

1. The Prohibition Notice was effective from 5 July 2019. This is the eighth prohibition notice since the commencement of the Fitness and Probity Regime and the third that the Central Bank has published in full.
2. The Fitness and Probity Regime was introduced by the Central Bank under the Central Bank Reform Act 2010 to ensure that regulated firms and individuals who work in these firms are committed to high standards of competence, integrity and honesty and are held to account when they fall below these standards.
3. The Central Bank acts as a gatekeeper to certain senior roles called “pre-approval controlled functions” or “PCFs” and it may assess the fitness and probity of the individuals proposed for these roles. Firms may not appoint individuals to these roles without the Central Bank’s approval in writing. We may also investigate individuals in key roles if we suspect their fitness and probity to perform their role, and we may prohibit them following such investigation, if appropriate.
4. The Fitness and Probity regime also imposes significant obligations on Firms and a letter sent to the CEOs of all regulated firms in April 2019 reminded firms of their obligations.
5. View further detail on the Fitness and Probity Regime, including the Fitness and Probity Standards

The Prohibition Notice (PDF) was issued following a Central Bank investigation into the misappropriation of client funds by Mr Tarpey during his time at Costello & Tarpey Financial Services.

The Prohibition Notice issued to Mr Trapey prohibits him from carrying out any controlled functions, including pre-approval controlled functions, in any regulated financial service provider for an indefinite period.

Seana Cunningham, Director of Enforcement and Anti-Money Laundering said:

“Mr Tarpey has been prohibited indefinitely, which is the most serious outcome under the fitness and probity regime. The Central Bank has a duty to uphold standards in respect of those working in the industry for the benefit and protection of users of financial services. The misconduct detailed in the Statement of Undisputed Facts clearly demonstrates Mr Tarpey's failure to act honestly, ethically and with integrity. This case should serve as a reminder that the Central Bank will prohibit people who act dishonestly. This outcome is also notable, as it is the first time that we have exercised our discretion to publish full reasons for a prohibition.”

Additional information

1. The Prohibition Notice was effective from 17 October 2018.
2. The investigation which led to the Prohibition Notice being issued arose from the receipt by the Central Bank of a protected disclosure. View further detail on protected disclosures.
3. This is the sixth Prohibition Notice issued by the Central Bank.
4. View further detail on the Fitness and Probity Regime, including the Fitness and Probity Standards

The prohibition arises from the Central Bank’s investigation into Mr Stamper’s management of the members’ prize draw in Citybus Employees’ Credit Union Limited and its finding that Mr Stamper was responsible for the misappropriation of a significant sum of money from Citybus Employees’ Credit Union Limited between 2010 and 2015. Mr Stamper cooperated fully with the Central Bank’s investigation.

The Prohibition Notice issued to Ms Mr Stamper prohibits him from carrying out any controlled functions, including pre-approval controlled functions, in any regulated financial service provider for an indefinite period.

Seana Cunningham, Director of Enforcement and Anti-Money Laundering, said:

“The Central Bank will continue to hold individuals to account when they fall short of expected standards of fitness and probity. These high standards are what the financial services industry and the wider community rightly expect of its senior individuals. Mr Stamper’s conduct fell far short of these standards, justifying the issuance of a prohibition order of indefinite duration, which is the most serious possible outcome to a fitness and probity investigation. Individual behaviour is shaped by a firm’s culture, which is in turn shaped by senior management. The Central Bank is committed to achieving greater individual accountability among senior management in the financial services sector. The Central Bank’s Enforcement actions, including prohibitions under its fitness and probity regime, underline its commitment.”

Additional information

1. The Prohibition Notice is effective from 30 May 2018.
2. The Central Bank is limited in its ability to disclose certain details of this case, due to an ongoing criminal investigation.
3. The fitness and probity regime was introduced under the Central Bank Reform Act 2010. The regime allows the Central Bank to prohibit persons, by way of a Prohibition Notice, where a person is found to lack the necessary fitness and/or probity. A Prohibition Notice may apply to a particular controlled function, a specified part of a controlled function or any controlled function (including pre-approval controlled functions (PCFs)) and may apply for a defined period of time or indefinitely.
4. In addition to the power to prohibit individuals the Central Bank Reform Act 2010 also confers the following powers upon the Central Bank:

   · A ‘Gatekeeper Function’ which allows the Central Bank to assess the fitness and probity of individuals before they are appointed to senior roles (PCFs) in regulated Page 2 of 2 firms. Since the Gatekeeper Function was introduced in 2012 a total of 54 individuals have withdrawn PCF applications on being called for interview; and

   · The power to sanction firms who employ individuals performing controlled functions who do not comply with fitness and probity standards. Further information on the Central Bank’s Administrative Sanctions Procedure. 

5. View further detail on the Fitness and Probity Regime, including the Fitness and Probity Standards
6. This is the fifth Prohibition Notice issued by the Central Bank.

The prohibition arises from a Central Bank investigation into Ms Harford’s involvement in unauthorised transactions on accounts at Rush Credit Union. The Prohibition Notice issued to Ms Harford prohibits her from carrying out any controlled functions, including pre-approval controlled functions, in any regulated financial service provider for an indefinite period.

Seana Cunningham, Director of Enforcement and Anti-Money Laundering, said:

“This prohibition notice has been issued pursuant to the Central Bank’s fitness and probity regime following the Bank’s investigation into financial irregularities at Rush Credit Union.

The Central Bank’s fitness and probity regime is in place to ensure that individuals performing key roles in regulated financial services firms are competent and capable, and act honestly, ethically and with integrity. The regime sets out the fitness and probity standards that those individuals must comply with, and places an obligation on the firms to ensure the compliance of their employees with these standards.

The prohibition of individuals for an indefinite period of time from performing specific roles in financial firms is the most serious outcome under the fitness and probity regime. This is the fourth prohibition notice issued by the Central Bank since its introduction.

It is imperative that individuals in positions of responsibility in financial services firms are committed to and demonstrate the highest ethical standards of practice and behaviour. This latest prohibition notice demonstrates that when individuals working in financial services firms do not comply with the Central Bank’s fitness and probity standards, the Central Bank will take action.”

Additional information

1. The Prohibition Notice is effective from 20 December 2017.
2. The Central Bank of Ireland is limited in its ability to disclose certain details of this case, due to ongoing criminal investigations.
3. The fitness and probity regime was introduced under the Central Bank Reform Act 2010. The regime allows the Central Bank to prohibit persons, by way of a Prohibition Notice, where a person is found to lack fitness and/or probity. The Prohibition may apply to a particular controlled function or any controlled function (including pre-approval controlled functions or ‘PCFs’) and may apply for a defined period of time or indefinitely.
4. In addition to the power to prohibit individuals the Central Bank Reform Act 2010 also confers the following powers upon the Central Bank:

   · A ‘Gatekeeper Function’ which allows the Central Bank to assess the fitness and probity of individuals before they are appointed to senior roles (PCFs) in regulated firms. Since the Gatekeeper Function was introduced in 2012 a total of 45 individuals have withdrawn PCF applications on being called for interview; and

   · The power to sanction firms who employ individuals performing controlled functions who do not comply with fitness and probity standards. Further information on the Central Bank’s Administrative Sanctions Procedure can be found here.

5. View further detail on the Fitness and Probity Regime, including the Fitness and Probity Standards
6. Liquidators were appointed to Rush Credit Union on 21 November 2016. Further information can be found in the Resolution Report on Rush Credit Union (PDF).
7. This is the fourth Prohibition Notice issued by the Central Bank.

The prohibition arises from a Central Bank investigation into Ms Butterly’s involvement in unauthorised transactions on accounts at Rush Credit Union. The Prohibition Notice issued to Ms Butterly prohibits her from carrying out any controlled functions, including pre-approval controlled functions, in any regulated financial service provider for an indefinite period.

Brenda O’Neill, the Head of Enforcement Investigations, said:

“In 2016, financial irregularities were identified at Rush Credit Union which contributed to it being placed into liquidation. As a result of the identification of these irregularities, the Central Bank’s Enforcement Division commenced investigations into various individuals including Ms Butterly. The investigation into Ms Butterly has now concluded with the issue of a prohibition order of indefinite duration, which is the most serious possible outcome to a fitness and probity investigation.

This outcome shows that that the Central Bank’s regulatory reach extends to individuals, and not just to firms. We take individual accountability very seriously and this case demonstrates our resolve to act where an individual’s conduct falls below expected standards. The fitness and probity regime was introduced to strengthen our enforcement powers against individuals in all parts of the financial services industry, including those working in the credit union sector. Persons involved in managing or overseeing credit unions, whether paid or voluntary, must adhere to the regulatory requirements of the role.

Through its supervisory interactions with credit unions, the Registry of Credit Unions has found that the introduction of the fitness and probity standards has contributed to an improvement in standards of governance in the sector. However, while many credit unions have embraced these requirements, the Registry of Credit Union remains concerned to see that changes in culture have not fully embedded in all credit unions. This is unacceptable given that credit unions are responsible for safeguarding their member’s funds. Where deficiencies in this area are identified, the sector should be in no doubt that the Central Bank will use its full powers, including its enforcement powers under the fitness and probity regime. The case against Ms Butterly is now closed. Other related investigations are ongoing.”

Additional information

1. The fitness and probity regime was introduced under the Central Bank Reform Act 2010. The regime allows the Central Bank to prohibit persons, by way of a Prohibition Notice, where a person is found to lack fitness and/or probity. The Prohibition may apply to a particular controlled function or any controlled function (including pre-approval controlled functions) and may apply for a defined period of time or indefinitely.
2. The Central Bank Reform Act 2010 also confers the following powers upon the Central Bank:

   · a ‘Gatekeeper Function’ in respect of proposed appointments to senior roles in regulated firms known as pre-approval controlled functions (“PCFs”); and

   · a ‘Sanctions Function’. The regime requires regulated firms to ensure that persons performing Controlled Functions or PCFs comply with the fitness and probity Standards. Failure to comply with this requirement may result in the imposition of sanctions by the Central Bank on the regulated firm (and persons concerned in the management, where relevant) pursuant to Part IIIC of the Central Bank Act 1942 (further information on the Central Bank's Administrative Sanctions Procedure).

3. View further detail on the Fitness and Probity Regime, including the Fitness and Probity Standards
4. The Prohibition Notice is effective from 16 June 2017.
5. The Central Bank of Ireland is limited in its ability to disclose certain details of this case, due to ongoing criminal investigations.
6. Liquidators were appointed to Rush Credit Union on 21 November 2016. Further information can be found in the Resolution Report on Rush Credit Union (PDF).
7. This is the third Prohibition Notice issued by the Central Bank under the fitness and probity regime.

Following a fitness and probity investigation conducted in accordance with Section 25 of the Central Bank Reform Act 2010, a Prohibition Notice has issued against Mr Darren Gleeson, of Portroe, Nenagh, Co. Tipperary, formerly a director of a retail intermediary firm, prohibiting him from carrying out any controlled functions, including pre-approval controlled functions, in any regulated financial service provider for an indefinite period.

The Fitness and Probity Regime:

The Central Bank Reform Act 2010 (the “2010 Act”) gave the Central Bank a consolidated power to approve senior appointments to regulated firms and powers to investigate, suspend, or prohibit persons from the financial services industry where concerns arise about their fitness and/or probity. Under the 2010 Act, the Central Bank issued a statutory code specifying the standards of Fitness and Probity with which all persons performing controlled functions or pre-approval controlled functions shall, at a minimum, comply (the “F&P Standards”). The F&P Standards provide that a person performing a controlled function or pre-approval controlled function is required to be:

· competent and capable;

· honest, ethical and to act with integrity; and

· financially sound.

One of the core functions of the Fitness and Probity Regime is to protect consumers from dealings with persons in controlled functions unless such persons are competent and capable, honest, ethical and of integrity and also financially sound. The regime allows the Central Bank to prohibit persons, by way of a Prohibition Notice, where it is found that a person is not of such fitness and/or probity as is appropriate to perform a particular controlled function or any controlled function (which includes pre-approval controlled functions).

NOTES TO EDITORS

A consolidated and enhanced Fitness and Probity Regime, introduced in the Central Bank Reform Act 2010 (the “2010 Act”) came into effect on 1 December 2011 for all regulated financial service providers (“RFSPs”) other than credit unions. Since 4 November 2014, the European Central Bank is exclusively the competent authority for the fitness and probity assessments of the following applicants:

· the management board of significant credit institutions; and

· the management board of all credit institutions applying for authorisation.

This regime was fully implemented by 1 December 2012. A Fitness and Probity Regime for credit unions came into effect on 1 August 2013. In addition to the F&P Standards, the Central Bank has also issued Guidance on the Fitness and Probity Standards. The Fitness and Probity Regime under Part 3 of the 2010 Act confers the following powers upon the Central Bank:

· a ‘Gatekeeper Function’ in respect of proposed appointments to senior roles in RFSPs known as pre-approval controlled functions (“PCFs”);

· an ‘Investigation Function’ which provides the Central Bank with a range of powers to investigate, suspend, or prohibit persons from PCFs and Controlled Functions ("CFs") in the financial services industry where concerns arise about their fitness and/or probity; and

· a ‘Sanctions Function’. The regime requires RFSPs to ensure that persons performing CFs or PCFs comply with the F&P Standards. Failure to comply with this requirement may result in the imposition of sanctions by the Central Bank on the RFSP (and persons concerned in the management, where relevant) pursuant to Part IIIC of the Central Bank Act 1942, further information on the Administrative Sanctions Procedure ("ASP").

Further detail on the Fitness and Probity regime is available on the Fitness and Probity section and Enforcement section of the Central Bank’s website.

The Central Bank has today published a Prohibition Notice (PDF) prohibiting Mr. Michael Kearns from performing any controlled function in all regulated financial service providers for a period of two years. Mr. Kearns acted as an Executive Director of Home Credit Ireland Limited, which is authorised as a Moneylender under the Consumer Credit Act 1995 (as amended). Mr. Kearns failed to properly disclose to the Central Bank the circumstances under which his former employment had ceased when he made an application for a pre-approval controlled function (PCF) position in Home Credit Ireland Limited.

Expired on 2 May 2021

Seana Cunningham, Director of Enforcement and Anti-Money Laundering said:

Under the Central Bank’s Fitness and Probity regime approval is required before an individual can be appointed to a senior position in financial services. This gatekeeper role allows the Central Bank to assess the fitness and probity of applicants for senior positions.

The Central Bank, in the performance of this gatekeeper role, is entitled to expect and insist on absolute candour and honesty from applicants. Full disclosure at application stage is required in order that the Central Bank can properly assess the fitness and probity of individuals before they are approved.  

Consequently, the provision of false or misleading information to the Central Bank may lead to the most serious of consequences – either denial of approval, or, if approval has previously been granted, as it was in this case, prohibition from financial services.

Additional information

1. The Prohibition Notice was effective from 2 May 2019. This is the seventh prohibition notice since the commencement of the Fitness and Probity regime and the second that the Central Bank has published in full, the first decision, which was published earlier this year can be found here.

2. The Fitness and Probity Regime was introduced by the Central Bank under the Central Bank Reform Act 2010 to ensure that individuals working in regulated firms meet high standards of competence, integrity and honesty.  The regime gave the Central Bank a gatekeeper role in approving or refusing individuals for senior roles in regulated firms. The regime also allows the Central Bank to investigate approved individuals where we suspect that they no longer meet the requirements of the Fitness and Probity Standards.

1. The Fitness and Probity regime also imposes significant obligations on Firms and a recent letter to the CEOs of all regulated firms reminded firms of their obligations. A copy of this letter can be found here.

4. Further detail on the Fitness and Probity Regime, including the Fitness and Probity Standards, can be found here. 

Following a fitness and probity investigation conducted in accordance with Section 25 of the Central Bank Reform Act 2010, a Prohibition Notice issued against Ms Colette Murphy, prohibiting her from performing certain pre-approval controlled functions for a period of two years from 23 February 2015.

Expired on 22 February 2017

The Central Bank of Ireland (the “Central Bank”) on 23 February 2015 issued a Prohibition Notice pursuant to section 43 of the Central Bank Reform Act 2010 (the “Act”) on the grounds set out below.

The Prohibition Notice is effective as of 23 February 2015 and prohibits Ms Colette Murphy of Hunter’s Moon, Knockfadda, Roundwood, County Wicklow, a sole trader insurance intermediary, from performing certain pre-approval controlled functions for a period of two years. Ms Murphy has agreed to comply in full with the terms of the Prohibition Notice.

Ms Murphy is prohibited from performing the following pre-approval controlled functions (PCF) pursuant to the Prohibition Notice:

1. PCF 10 (Sole Trader);
2. PCF 15 (Head of Compliance with responsibility for anti-money laundering and counter-terrorist financing); and
3. PCF 17 (Head of Retail Sales).

Grounds

Ms Murphy’s actions which gave rise to the opinion and findings of the Central Bank as set out below include the following:

• Ms Murphy’s management and documentation of the petty cash box of a regulated financial service provider was not in accordance with good operational controls and good accounting practice and the manner in which Ms Murphy sought recompense from the petty cash box was irregular and displayed poor judgement.
• Ms Murphy diverted client funds which were due to be refunded to a client for her own benefit, in circumstances where she was aware or ought to have been aware that what she was doing was wrong, and in doing so, displayed poor judgment and an inability to discharge her duties.

In the opinion of the Central Bank, Ms Murphy is not of such fitness and probity as is appropriate to perform the pre-approval controlled functions set out above based on the following findings:

1. Ms Murphy does not satisfy the Fitness and Probity Standards 2011 (Code issued pursuant to Section 50 of the Act);
2. Ms Murphy participated in serious misconduct in relation to the business of a regulated financial service provider;
3. Ms Murphy failed to make a disclosure to the Central Bank pursuant to Section 38(2) of the Central Bank (Supervision and Enforcement) Act 2013 or made such a disclosure knowing it to be false or misleading in a material respect; and
4. Ms Murphy directly or indirectly provided information to the Central Bank pursuant to Part 3 of the Act or otherwise that she knew or ought to have known was false or misleading