Venue Hearing Venue: The Rolls BuildingHearing Heard on: 28-30 November,1,2,5,6,8,9,12-15 December 2022, 5-6 &Date Judgment date: 12 June 2023
London EC4A 1NL
FINANCIAL SERVICES - whether executives of a private bank acted without integrity in relation to Finder’s arrangements entered into between the bank and a person connected with the bank’s client
Fitness and properness of the executives concerned - prohibition order in relation to all functions in relation to regulated activities- s56 FSMA
23-27 January 2023
Before
JUDGE TIMOTHY HERRINGTONMEMBER GARY BOTTRIELLMEMBER MARK WHITE
Between
THOMAS SEILERApplicantLOUISE WHITESTONEApplicantGUSTAVO RAITZINApplicantMr Raitzin is the period between August and December 2010ApplicantRelevant Risks the risks arising out of the relationship between Julius BaerApplicantand Yukos and with Mr Merinson as the Finder associatedApplicantwith Yukos as summarised at [12] of this Decision andApplicantwhich the Authority contends the Applicants recklesslyApplicantfailed to have regard to in their dealings with those relationshipsApplicantRDC the Regulatory Decisions Committee of the AuthorityApplicantSecond Commission Payment the Commission Payment made to Mr Merinson on or aroundApplicant31 December 2010ApplicantSecond FX Transaction means collectively the series of FX transactions conducted byApplicantJulius Baer for Fair Oaks on 23 November 2010ApplicantThird Commission Payment the Commission Payment made to Mr Merinson on or aroundApplicant1 February 2012ApplicantThird FX Transaction the FX transaction converting €7 million into US dollarsApplicantconducted by Julius Baer for Fair Oaks pursuant to an orderApplicantplaced on 15 August 2011ApplicantYukos or Yukos Group the Yukos group of companies which includes Yukos CapitalApplicantYukos International, Yukos Hydrocarbons and Fair OaksApplicantYukos Capital Yukos Capital S.a.R.LApplicantYukos Hydrocarbons Yukos Hydrocarbons Investments LimitedApplicantYukos International Yukos International UK BVApplicantPeopleApplicantReferences to a position held by an individual are references to the relevant position held at the time of the events that are relevant to these proceedingsApplicantJulius BaerApplicantMr Bates Stuart Bates, who was an approved person holding theApplicantCF 1 (Director) function at JBIApplicantMr Baumgartner Roman Baumgartner, Head of BJB ComplianceApplicantMr Benischke Eric Benischke, chief of staff to Mr SeilerApplicantMs Bohn Nicole Bohn, private banking legal team, BJB ZurichApplicantMr Campeanu Viorel Campeanu, Managing Director and Senior AdvisorApplicantat JBI and line manager of Mrs WhitestoneApplicantMr Courrier Sylvain Courrier, head of external asset managers andApplicantFinders, Market Head and Board Member, BJBApplicantBahamasApplicantMs Denman Melanie Denman, assistant to Mrs WhitestoneApplicantMr Fellay Jean-Marc Fellay, Chief Operating OfficerApplicantand Deputy Chief Executive Officer, BJB BahamasApplicantMr Gerber Daniel Gerber, Chief Executive Officer, JBIApplicantMr Narrandes Jashmir Narrandes, member of JBI ComplianceApplicantMr Nikolov Peter Nikolov, head of administrative supportApplicantfor Mr RaitzinApplicantMr Porter Darren Porter, Executive Director, Head of PrivateApplicantClients Advisory, JBIApplicantMr Raitzin Gustavo Raitzin, Applicant in these referencesApplicantmember of the BJB Executive Board, Head of BJB’sApplicantInternational Business and Regional Head for LatinApplicantAmerica, Spain, Russia, Central and Eastern EuropeApplicantand IsraelApplicantMs Rolle Rochelle Rolle, Director and Head of ComplianceApplicantBJB BahamasApplicantMr Seiler Thomas Seiler, Applicant in these referencesApplicantManaging Director at BJB and Sub-RegionalApplicant(Market) Head for Russia and Central and EasternApplicantEurope, also from 30 March 2011Director at JBIApplicantholding the CF 2 (Non-Executive Director) functionApplicantMs Senn-Sutter Sonja Senn-Sutter, member of BJB’s BusinessApplicantand Operational Risk DepartmentApplicantMr Schwarz Oliver Schwarz, head of administrative support forApplicantMr Seiler in succession to Mr BenischkeApplicantMr Spadaro Salvatore Spadaro, member of BJB’s FindersApplicantSupport and PayablesApplicantMr Taylor Matthew Taylor, investment dealer at JBI andApplicantapproved person holding the CF 30Applicant(Investment Adviser) functionApplicantMs Thomson Bielmann Carolyn Thomson Bielmann, Head ofApplicantAnti-Money Laundering and Sensitive ClientsApplicantfor BJB and member of BJB ComplianceApplicantMr Weidmann Tobias Weidmann, member of BJB Zurich’s Finder’sApplicantDeskApplicantMrs Whitestone Louise Whitestone, Applicant in these referencesApplicantRelationship Manager at JBI and approved personApplicantholding the CF 30 (Investment Adviser) functionApplicantYukosApplicantMr Feldman Daniel Feldman, sole director of Yukos CapitalApplicantand director of Fair Oaks and Yukos HydrocarbonsApplicantMr Ketcha Sergei Ketcha, a director of Fair OaksApplicantMr Malter Harlan Malter, a director of Fair OaksApplicantMr Merinson Dmitri Merinson, Finder to BJB, also FinancialApplicantController of Yukos International and ChiefApplicantFinancial Officer of Yukos Capital and YukosApplicantInternationalApplicantThe AuthorityApplicantMr Neary Rory Neary, Acting Manager in theApplicantAuthority’s Enforcement and Market OversightApplicantDivisionApplicantTHE FINANCIAL CONDUCT AUTHORITYRespondentThe AuthorityRespondentTHOMAS SEILERLOUISE WHITESTONEGUSTAVO RAITZINApplicantsTHE FINANCIAL CONDUCT AUTHORITYThe Authority for Mr Seiler: Ben Strong KC and Jade Fowler, Counsel, instructed by Mishcon de Reya LLP for Mrs Whitestone: Sarah Clarke KC and Hannah Hinton, Counsel, instructed by Charles Douglas Solicitors LLP for Mr Raitzin: Ben Jaffey KC and Tom Lowenthal, Counsel, instructed by Stephenson Harwood LLP for Authority: Andrew George KC, Celia Rooney and Ava Mayer, Counsel, instructed by the Financial Conduct AuthorityGLOSSARYTermsApplicant any of Mrs Whitestone, Mr Seiler and Mr RaitzinAuthority the body corporate previously known as the Financial ServicesAuthority and renamed on 1 April 2013 as the FinancialConduct AuthorityBJB Bank Julius Baer & Co Limited, a private bank incorporatedand regulated in SwitzerlandBJB Bahamas Julius Baer Bank & Trust (Bahamas) Limited, a subsidiary ofBJB incorporated and regulated in the BahamasBJB Compliance BJB’s compliance department and collectively membersof that department, based in SwitzerlandBJB Legal means BJB’s legal department and collectively membersof that department, based in SwitzerlandBJB Singapore means BJB’s Singapore branchBJB Switzerland BJB’s office in ZürichCommission Payments payments made to Mr Merinson by Julius Baer followingthe execution of the First FX Transaction, the Second FXTransaction and the Third FX TransactionCoY a derivative instrument combining an FX linked deposit witha currency option, with the aim of providing a higher yieldreturn than that available for a standard deposit but alsocarrying a higher risk than a standard deposit due to theexposure to FX rate movementsCompliance means BJB Compliance and/or JBI Compliance as thecontext requiresEnforcement the Authority’s Enforcement and Market Oversight DivisionFair Oaks Fair Oaks Trade and Investment Limited, a company withinthe Yukos GroupFinder an external third party engaged by Julius Baer withthe sole task of introducing potential clients to Julius Baerin return for commissionFinder’s Policy BJB’s policy document titled “Cooperation with Finders”which was effective from 11 June 2010First Commission Payment the Commission Payment made to Mr Merinson on or around1 September 2010First FX Transaction collectively the series of FX transactions conducted by JuliusBaer for Yukos between 11 and 13 August 2010FSMA Financial Services and Markets Act 2000 (as amended)FX forex or foreign exchangeFX Transactions the First FX Transaction, the Second FX Transaction and theThird FX TransactionJBI Julius Baer International Limited, a subsidiary of BJBincorporated in the UK and regulated by the AuthorityJBI Compliance JBI’s compliance department and collectively members of thatdepartment, based in LondonJBI Final Notice the Final Notice issued by the Authority to JBI on 10 February 2022 pursuant to which the Authority imposed a financialpenalty on JBI for among other things, failings in JBI’ssystems and controlsJulius Baer BJB and/or those of its subsidiaries as the context requiresJulius Baer Group means the Julius Baer group of companies which includesBJB, BJB Bahamas, BJB Singapore, BJP Guernsey,BJB Switzerland and JBIMyCRM the client relationship management system established andoperated by JBI for purpose of recording informationrelating to clients, including account opening documents,client contact reports and relevant correspondence with clientsPEPs politically exposed personsRelevant Period in relation to Mrs Whitestone is the period between July 2010and December 2011, in relation to Mr Seiler is the periodbetween July 2010 and December 2012 and in relation toMr Raitzin is the period between August and December 2010Relevant Risks the risks arising out of the relationship between Julius Baerand Yukos and with Mr Merinson as the Finder associatedwith Yukos as summarised at [12] of this Decision andwhich the Authority contends the Applicants recklesslyfailed to have regard to in their dealings with those relationshipsRDC the Regulatory Decisions Committee of the AuthoritySecond Commission Payment the Commission Payment made to Mr Merinson on or around31 December 2010Second FX Transaction means collectively the series of FX transactions conducted byJulius Baer for Fair Oaks on 23 November 2010Third Commission Payment the Commission Payment made to Mr Merinson on or around1 February 2012Third FX Transaction the FX transaction converting €7 million into US dollarsconducted by Julius Baer for Fair Oaks pursuant to an orderplaced on 15 August 2011Yukos or Yukos Group the Yukos group of companies which includes Yukos Capital,Yukos International, Yukos Hydrocarbons and Fair OaksYukos Capital Yukos Capital S.a.R.LYukos Hydrocarbons Yukos Hydrocarbons Investments LimitedYukos International Yukos International UK BVPeople References to a position held by an individual are references to the relevant position held at the time of the events that are relevant to these proceedingsJulius BaerMr Bates Stuart Bates, who was an approved person holding theCF 1 (Director) function at JBIMr Baumgartner Roman Baumgartner, Head of BJB ComplianceMr Benischke Eric Benischke, chief of staff to Mr SeilerMs Bohn Nicole Bohn, private banking legal team, BJB ZurichMr Campeanu Viorel Campeanu, Managing Director and Senior Advisorat JBI and line manager of Mrs WhitestoneMr Courrier Sylvain Courrier, head of external asset managers andFinders, Market Head and Board Member, BJBBahamasMs Denman Melanie Denman, assistant to Mrs WhitestoneMr Fellay Jean-Marc Fellay, Chief Operating Officerand Deputy Chief Executive Officer, BJB BahamasMr Gerber Daniel Gerber, Chief Executive Officer, JBIMr Narrandes Jashmir Narrandes, member of JBI ComplianceMr Nikolov Peter Nikolov, head of administrative supportfor Mr RaitzinMr Porter Darren Porter, Executive Director, Head of PrivateClients Advisory, JBIMr Raitzin Gustavo Raitzin, Applicant in these references,member of the BJB Executive Board, Head of BJB’sInternational Business and Regional Head for LatinAmerica, Spain, Russia, Central and Eastern Europeand IsraelMs Rolle Rochelle Rolle, Director and Head of ComplianceBJB BahamasMr Seiler Thomas Seiler, Applicant in these references,Managing Director at BJB and Sub-Regional(Market) Head for Russia and Central and EasternEurope, also from 30 March 2011Director at JBIholding the CF 2 (Non-Executive Director) functionMs Senn-Sutter Sonja Senn-Sutter, member of BJB’s Businessand Operational Risk DepartmentMr Schwarz Oliver Schwarz, head of administrative support forMr Seiler in succession to Mr BenischkeMr Spadaro Salvatore Spadaro, member of BJB’s FindersSupport and PayablesMr Taylor Matthew Taylor, investment dealer at JBI andapproved person holding the CF 30(Investment Adviser) functionMs Thomson Bielmann Carolyn Thomson Bielmann, Head ofAnti-Money Laundering and Sensitive Clientsfor BJB and member of BJB ComplianceMr Weidmann Tobias Weidmann, member of BJB Zurich’s Finder’sDeskMrs Whitestone Louise Whitestone, Applicant in these references,Relationship Manager at JBI and approved personholding the CF 30 (Investment Adviser) functionYukosMr Feldman Daniel Feldman, sole director of Yukos Capitaland director of Fair Oaks and Yukos HydrocarbonsMr Ketcha Sergei Ketcha, a director of Fair OaksMr Malter Harlan Malter, a director of Fair OaksMr Merinson Dmitri Merinson, Finder to BJB, also FinancialController of Yukos International and ChiefFinancial Officer of Yukos Capital and YukosInternationalThe AuthorityMr Neary Rory Neary, Acting Manager in theAuthority’s Enforcement and Market OversightDivisionTABLE OF CONTENTSParagraph number