BancTrust chief contests FCA fine over undisclosed U.S. and Venezuela penalties

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BancTrust CEO challenges FCA fine

Highlights

BancTrust CEO Fuenmayor is challenging an FCA fine at London’s Upper Tribunal, arguing disclosure of Venezuelan sanctions risks undermining freedom of expression.
The FCA alleges Fuenmayor failed to disclose a 2019 U.S. FINRA suspension and Venezuelan account closures, standards deemed negligent for his senior position.
The case underscores FCA emphasis on foreign regulatory disclosure, after it identified the Venezuelan account freeze via open-source checks in 2023, highlighting heightened scrutiny for UK executives.

Tribunal challenge over disclosure obligations

As first reported by the Financial Times, Fuenmayor has filed a case at London’s Upper Tribunal against the FCA’s proposed sanction, arguing that requiring disclosure of measures he describes as retaliation by Venezuela’s authorities risks undermining freedom of expression.

The FCA says he was negligent in failing to disclose a 2019 suspension and fine imposed by the Financial Industry Regulatory Authority in the U.S., along with the closure of his bank accounts in Venezuela. According to documents seen by the Financial Times, the regulator says those omissions fall short of the standards expected of someone in his position.

Fuenmayor says the Venezuelan measures followed a UK event he sponsored in November 2019 in support of human rights in Venezuela and in opposition to then president Nicolás Maduro. His lawyers argue that, because the UK government had not recognised the Maduro regime, he had no obligation to disclose what they describe as reprisals, and they add that hyperinflation has reduced the value of the frozen accounts to less than one U.S. cent.

He also says the FCA originally planned to ban him and seek a fine of more than £350,000 before he challenged the case. The watchdog says legal proceedings are ongoing and it cannot comment further.

Regulatory and sector implications in the UK

Fuenmayor, who has led BancTrust since 2018 and has since become a British citizen, says the U.S. penalty related to a technical breach involving registration requirements and did not prevent him from working after a 15-month suspension ended. He says he later retook the relevant exams, while the FCA notes that he disclosed the Finra action only in 2021 and accepted in an interview that he should have done so earlier.

His legal team says a corrected disclosure stemming from a misunderstanding over extraterritoriality does not meet the threshold for negligence under English law. The FCA rejects that position, saying the fine and suspension show the U.S. breach was not negligible and that enforcement is needed to protect consumers and the integrity of the UK financial system.

The regulator also says Fuenmayor was advised by BancTrust’s head of compliance in 2021 to disclose both the Venezuelan and U.S. actions. Two years later, the FCA says it identified the Venezuelan account freeze through routine open-source checks, sharpening the case’s significance for senior executives facing scrutiny over how foreign regulatory events must be reported in the UK.

Our earlier article looked at BP’s efforts to reassure investors amid leadership changes and heightened governance scrutiny. We noted that deputy CEO Carol Howle sold nearly £2 million of shares during the transition period and that the board’s removal of chair Albert Manifold over governance concerns added reputational pressure as the company refocused on its core oil and gas strategy.

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