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It’s all relative


Mark Watson considers the decision of the Upper Tribunal in Frensham v Financial Conduct Authority [2021] UKUT 222 (TCC) and its impact upon the regulation of those in financial services.

On 31 August 2021, the Upper Tribunal rejected an appeal brought by Jon Frensham, previously known as Jonathan James Hunt, regarding the decision of the Financial Conduct Authority (“FCA”) not to allow him to operate as a financial adviser in October 2020, following a conviction in 2017 for an offence neither of dishonesty nor related to his professional practice.

Following the decision in Beckwithmy colleagues William England and Jim Olphert neatly summarised the decisions taken by the High Court in relation to the regulation of regulated persons in the context of misconduct in an article available here.

On the face of it, and in apparent contrast to Frensham, the authority of Beckwith indicated that the misconduct must touch upon the regulated person’s practice in order for any intervention by the regulator to be just.


Jon Frensham received a 22-month sentence, suspended for 18 months in March 2017, having been arrested the year before.

Whilst operating as an approved financial adviser, Frensham had messaged a girl called ‘Holly’, who at an early stage told him that she was 15 years old.  Many of Frensham’s messages were said to be sexual in tone, and one suggested that he wanted a photo of her in her school uniform. When Frensham met ‘Holly’, she turned out to be an adult who was a member of a paedophile vigilante group.

Significantly – as it turns out – Frensham was already on police bail at this time, having been arrested for another matter, although this ultimately did not result in any charges being brought.

As a result, on October 2020, the FCA issued a decision notice, barring Frensham from acting as a financial adviser.

The FCA argued that Frensham was not a fit and proper person to perform any function in relation to any regulated activity, as he lacked the necessary integrity, and posed a risk both to consumers and to confidence in the regulation of the financial system.

Frensham argued essentially that the conviction had nothing to do with his professional life, that he had always acted with integrity therein, and that it was therefore of no relevance to his standing in the context of regulation of financial services.

The FCA rejected that argument, suggesting that as the offence involved the exploitation of those younger than Frensham it therefore amounted to an abuse of a position of trust and that the conviction was incompatible with his position as a regulated person.

Frensham appealed the decision on the basis that the FCA had wrongly applied the ‘fit and proper’ test to the facts and had allowed irrelevant considerations to affect its judgment.

The decision was upheld by the Upper Tribunal.

On its face, this decision appears to be at odds with the decision in Beckwith.

However it is important to note that the Upper Tribunal in Frensham upheld the decision of the FCA but for different reasons than those identified by the FCA in its decision notice.

Factors in the decision

Frensham is the first case in which the Upper Tribunal has had to consider whether the FCA is entitled to issue a decision notice against a person for a criminal offence not involving dishonesty and unrelated to the regulated profession of the individual.

In the decision of the Upper Tribunal, it was recognised that there was a substantial gap between the offence committed and the profession of Frensham, and that the FCA had failed to forge that link. It is extremely interesting that the comment was made that if the decision of the FCA had been based only upon the conviction the Upper Tribunal would have asked for reconsideration in the decision. However, there were two other factors in play which the Tribunal decided vindicated the decision of the FCA.

Frensham had committed the offence when on police bail for another suspected offence. The Upper Tribunal held that this was evidence on which the FCA was entitled to rely when considering whether there was a significant risk that he would disregard his regulatory obligations in future.

Frensham had also failed to report to the FCA his first arrest and imposition of bail conditions, his second arrest and his remand into custody.

In our view, the reasons why those failures occurred follow a similar pattern. They all provide evidence that in his dealings with the Authority Mr Frensham decided to put his own interests and those of the Firm before the need to comply with the clear obligations to be open and transparent with the Authority” (paragraph 198)


On closer analysis, therefore, the reasoning underlying the decision in Frensham therefore is not at odds with the decision in Beckwith, as the breach of bail conditions and lack of candour, on top of the conviction, were factors that permitted the FCA to make its decision and issue the notice as it did.

However, there is a worrying paragraph – albeit perhaps arguably obiter – in the decision. In paragraph 178, the Upper Tribunal stated:

However, the fact that the specific examples in EG and FIT are directed primarily to issues of dishonesty and dealings with clients does not in our view dilute the general principle that the Authority is fully entitled to take into account non-financial misconduct which occurs outside the work setting.”

This appears to be at odds with the decision in Beckwith and it does not appear that the paragraph, in the context of the subsequent paragraphs in the decision, is a clumsily worded paragraph. The Upper Tribunal appeared in that case to be of the view that the FCA was entitled to consider non-financial misconduct when considering the suitability of persons continuing to provide regulated facilities such as financial advice.

As such, any person regulated by the FCA should pay particular attention to this decision as it gives a clear steer that the FCA will not stop at the office door and the private lives of whose whom it regulates will be considered carefully in its decision-making process. The other aspect of individuals’ private lives which commonly gives rise to regulatory intervention is of course social media. There is no doubt that in due course a regulator will choose to take the comments of the Upper Tribunal in Frensham and seek to apply them to controversial social media comments even where the comments are unrelated to honesty or professional practice. The moral is to be careful, and to seek legal advice at an early stage.

Mark Watson is a member of Carmelite Chambers who specialises in financial crime and was called to the Bar in 2011. He has regularly represented professionals before their regulators. He is also an elected member of the Criminal Bar Association Executive Committee.


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