Fuenmayor decision puts SMCR disclosure duties back in the spotlight

The FCA has decided to fine Carlos Fuenmayor, Chief Executive of BancTrust, £99,600 for failing to disclose three separate matters to the regulator, including a US Financial Industry Regulatory Authority investigation opened in December 2017 and subsequent sanction in June 2019, plus the freezing of his Venezuelan bank accounts by the National Financial Intelligence Unit of Venezuela shortly before a November 2019 inspection (FCA). Fuenmayor has referred the Decision Notice to the Upper Tribunal, so the findings remain provisional, but the regulator's positioning is already instructive (FCA).

Disclosure as a fitness test, not a formality

The FCA concluded Fuenmayor's failures were negligent and that he breached APER Statement of Principle 4 and Senior Manager Conduct Rule 4, which requires individuals to disclose information the FCA would reasonably expect (FCA). The regulator's framing matters: the harm identified is not the underlying conduct in the US or Venezuela, but the fact that non-disclosure denied the FCA the chance to assess fitness and propriety. Therese Chambers, executive director of enforcement and market oversight, said disclosing information the FCA reasonably expects, promptly, is 'key to maintaining trust in financial services' (FCA). For senior managers, that reframes disclosure from a paperwork exercise to a continuing duty whose breach is itself the misconduct.

The board accountability problem

The failures persisted through application forms submitted on behalf of BancTrust until December 2021, a window of roughly four years from the start of the FIRA investigation (FCA). That gap raises uncomfortable questions for nomination committees and chairs at smaller authorised firms: what independent verification sits behind SMCR attestations, and how often is it refreshed. Most firms rely on candidate self-declaration backed by criminal records checks and references. Foreign regulatory action, particularly outside the major Anglophone jurisdictions, and overseas asset freezes rarely surface through standard screening. Boards that treat annual fit and proper certification as a sign-off rather than an active inquiry are carrying a risk the FCA has now priced.

A pattern, not an isolated case

The Fuenmayor decision arrives in the same news cycle as the court-confirmed special administration of Euro Exchange Securities UK Limited, where the FCA cited 'serious concerns' about the firm's operation and 'significant risks of financial crime', including weaknesses in governance and ownership (FCA). Matthew Long, director of payments and digital assets at the FCA, said fighting financial crime 'is at the heart of our strategy' (FCA). Read together, the two actions signal that the regulator is willing to pursue both firms and individuals where governance and disclosure shortcomings intersect with financial crime risk, and to do so using its fullest available powers, including the first use of the Payment and Electronic Money Institution Insolvency Regulations 2021 (FCA).

What senior leaders should take from this

The practical implication is narrow and clear. Chairs, SMF16 and SMF17 holders, and heads of compliance should be asking three questions this quarter: whether their fit and proper process actively tests for overseas regulatory action and asset restrictions, whether ongoing disclosure obligations are reinforced beyond onboarding, and whether the firm can evidence what it knew, and when, about every senior manager on its register. The Fuenmayor case will be litigated at the Upper Tribunal, but the standard the FCA is asserting is already operative.