Guernsey: Guernsey Royal Court Issues Regulatory Decision On Prohibition Orders, Fines And Public Statements


Y v Chairman of the GFSC.

Handed down by the Deputy Bailiff on 29 November 2018.


Mr Y was an executive director of the Licensee company X.  Under the terms of his employment with X, Y was not permitted to accept any other work except with the permission of X.  Y also had an accountancy practice which was registered with the GFSC but Y did not have the relevant regulatory permission from the GFSC to incorporate companies for clients.

Licensee X then commenced disciplinary proceedings against Y for using X's registration with the GFSC to carry out company formations for persons who were not clients of X and without the X's permission.  Y subsequently resigned from X and explained what had happened to the GFSC.

The GFSC commenced an investigation and issued a final "minded to" notice on 24 January 2018. The main allegation against Y was that he incorporated 12 Guernsey companies for his own clients through his accountancy practice (and not through company X which was licensed) and that he did not have an appropriate regulatory licence to carry out that type of work.

In the "minded to notice" the GFSC sought to:

  • Prohibit Y from acting as a director, controller, partner, manager etc under any of the regulatory laws for a period of 4 years
  • Dis-apply the exemption under the Fiduciary Law 2000 which allows an individual to act as a director of six companies or less without a licence;
  • Apply a financial penalty of £13,000
  • Issue a public statement under the Financial Services Law

Y appealed to the Royal Court against all of the above findings which were handed down by the GFSC's Senior Decision Maker.

The Royal Court findings

The Deputy Bailiff found that the GFSC did not have the jurisdiction or power to make prohibition orders that are limited in time, they only had the power to make unlimited prohibition orders (as in the UK) against Y albeit they could indicate when it might be appropriate for Y to re-apply for a license.

He therefore remitted the decision to impose the prohibition order back to the GFSC. He also considered that the GFSC could not dis-apply the exemption for the regulation of directorships under section 3(1)(g) of the Fiduciaries Law for a limited period for the same reason ie GFSC could only dis-apply the exemption indefinitely.

However, the Deputy Bailiff did emphasise that he considered that the Senior Decision Maker (appointed by the GFSC) was justified in making a prohibition order as Y had not fulfilled the minimum criteria for licensing.

The Senior Decision Maker cited a lack of openness and honesty displayed by Y during the investigation and Y's probity, competence and soundness of judgment were also questioned. The Deputy Bailiff agreed with these findings and the fact that there was a reputational risk to the Bailiwick caused by Y's actions.

Y had also appealed against the issue of a public statement and the Deputy Bailiff dismissed this aspect of the appeal and said that in some circumstances the public statement can be beneficial to the individual who has been sanctioned as it reduces speculation and explains exactly what had happened. However, he did say that the statement should only provide an explanation as to how the conclusion was reached that Y did not fulfil the minimum level of criteria for licensing and it should not have included alternative arguments raised on Y's behalf .

When comparing the level of punishment to other cases it was argued on behalf of Y that sanctions were only applicable if investors' money had been put at risk, there were failures  to deal properly with anti-money laundering procedures or where there had been insufficient action to remedy previous defects identified by the GFSC.

The Deputy Bailiff agreed that no investors' money had been put at risk and nor did the investigation arise out of an action already undertaken by the GFSC in respect of Y.  However, he did not consider the imposition of a fine of £13,000 to be unreasonable as he found that there had been aggravating factors such as Y's direct responsibility, apparent lack of appreciation of, and attempts to downplay, the seriousness of the conduct.

The take away points

  • The GFSC can no longer issue fixed-term prohibition orders but, like in the UK, they can prohibit individuals indefinitely but then invite them to reapply for prohibitions to be lifted after a certain number of years
  • Public statements must be more focused on explaining exactly what happened and why and should not provide any extraneous material or arguments put forward in defence
  • Even if investors' money is not at risk, nor anti money laundering rules breached, an individual can still be prohibited from working as a director etc
  • The crucial failing by the individual here was his lack of openness and probity and the fact that he did not seem to realise how serious his mistakes were.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions