The FSC took the decision to go after the three directors in order to see to it that investors who lost out as a result of RFSL’s collapse were compensated.
In addition to being ordered to pay £6,269,111.83, the three men – Michael Whitting, Anthony Whitting and Stephen Putnam – were also told to pay the costs of the court action.
It was the first time the FSC has ever taken restitution action against the directors of a company as well as the company itself, according to the FSC. The court decision followed the award of a judgment against the three men in November 2009.
The case dates back to 2003, when the FSC took action against Rock Financial after it discovered that client monies had been misappropriated. The action led to the firm’s losing its licence and being put into liquidation; a police investigation followed, but no one was prosecuted. According to FSC chief executive Marcus Killick, the final amount missing which was able to be demonstrated to the satisfaction of the courts was the amount just awarded to the FSC – £6.3m.
In a statement on its website, the FSC said it was “considering its options leading to an enforcement of the order made by the court”.
FSC had waited
The FSC said it had held off taking action against the three men in order to allow the liquidators in the case to do their job collecting assets on behalf of RFSL’s creditors, and for a criminal investigation to be undertaken.
“However, in the face of difficulties encountered by the liquidators, the FSC issued proceedings for regulatory breaches seeking a civil restitution order, among other orders, against the directors”, it said.
FSC chief executive Marcus Killick said the case demonstrated that the FSC would “not shy away from taking whatever action [is] necessary to protect the public from financial loss, or deal with those who have caused it”.
He added: “The action we have taken in the Supreme Court of Gibraltar underlines the commitment of my team to pursue every possible avenue to seek restitution for the investors in RFSL. It has been a long process and, quite rightly, we stood aside [while] the criminal investigations were ongoing.
“Nevertheless, as soon as we were able, we used the powers granted to us to bring this matter to a conclusion.”