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A local investment advisor's failure to raise the alarm about a potential client who said he was seeking a "magician" and warned he might be "jailed" or "shown on nightly news as a big catch", ended up costing him his career.
As the island's money laundering avoidance practices come under closer scrutiny than ever, Express took a closer look at what the Employment Tribunal dubbed a "sad but cautionary" case...
Former finance worker, Simon Dowling, was fired over failing to report suspicious emails from a potential new investment client.
In response, he claimed unfair dismissal against his employer Concentric Analytics Limited, arguing that at the time he was corresponding with the client, the dodgy emails did not yet appear suspicious, and there was no need to report them.
Money-laundering red flags
In Spring 2021, the former finance worker, Mr Dowling, was corresponding with a potential new client. This client, according to Mr Dowling, was an ‘ex-pat’, operating across several jurisdictions. They wanted to understand how their investment would work, particularly in terms of tax, if placed with the Jersey-based company, Concentric.
Pictured: Mr Dowling exchanged emails with the potential client in 2021.
Mr Dowling, with ‘decades of senior experience’ within the financial services industry, worked on behalf of Concentric Financial Services Limited as an investment advisor.
“But how could I have funds transferred to me without raising flags?” the client asked him.
“Do you have a higher duty or mandate to report candidates that you could classify as suspicious cases?”
“Is it possible that you had no kickbacks because all your customers haven’t anything to hide? Maybe it’s only me who has?”
Mr Dowling responded to the client and the pair exchanged emails during the course of April and May 2021. According to Mr Dowling, he was building an understanding of the client’s circumstances and did not regard the communications as unusual at that stage.
It was only when a compliance officer at the company discovered some of the correspondence – the emails had been misfiled – that suspicion arose.
The damage, however, was already done.
As with any company regulated by the Jersey Financial Services Commission, reporting suspicions of money laundering or terrorist financing is a statutory obligation. At Concentric, staff must report any such suspicions by completing an internal suspicious activity report (SAR), and passing it directly to the Money Laundering Reporting Officer (MLRO).
Mr Dowling, however, had failed to file a report, and in doing so, had not complied with his contractual and statutory duty. As a result, he was fired.
In response, Mr Dowling claimed unfair dismissal. The trial took place across a three-day hearing this month. The Chair of the Tribunal found him guilty of gross misconduct and consequently that Concentric was entitled to dismiss Mr Dowling without notice.
Pictured: Mr Dowling claimed unfair dismissal against his employer Concentric Analytics Limited.
The newly-released tribunal document explains how Mr Dowling had not yet arrived at suspicion, and thus there was no obligation for an internal SAR.
The document continues: Yes, he had a mindset which he described variously as having ‘concerns’, ‘a vague sense of unease and a ‘heightened awareness’, but he was still gathering information about the client and it was only at some future point that his mindset might have ‘tipped over into suspicion’.
It was Mr Dowling’s particular experience of international clients of this sort, and the fact they often had ‘tax issues’ that made him enquire and wait. His engagement with the potential client was a work in progress, interrupted by the disciplinary proceedings when the take-on work was barely 30% complete.
Other members of the company had different views.
James Painter, a director at Concentric with substantial experience in the financial services sector, described the emails as the most suspicious he had ever seen. While Tracey Freeman, the company’s MLRO, said they were so obviously suspicious items that she would have filed an immediate internal SAR on receipt of any one of them.
During the tribunal, various extracts from the email correspondence were shared, including the following written by the potential client:
“As you rightly said there are no guarantees in life and I guess I am/was looking for a magician. Well magicians don’t really exist today but you could be the nearest to it I could possibly find.”
“It all boils down to the heavy punishment for a past that I can’t change. How suddenly I find myself in a world with so few options.”
“Hi Simon. Would talk to the authorities before or after on boarding?
They wouldn’t be complacent, they’d parade me in public square and show on nightly news as a big catch, there would be no merci (sic) am afraid.
Still would you go ahead with it? All my accounts, assets would be confiscated and I’d be jailed…”
Ultimately, Mr Dowling described his failure as an ‘innocent aberration’. If he could go back in time, he said, he would not have conducted himself in the manner he did.
Pictured: The Chair of the Tribunal referred to the 'scrupulous attention' required of employees to protect aginst money laundering.
The judgment concluded: “The Tribunal’s task is to decide whether, in all the circumstances of the case, the employer acted reasonably in treating the relevant reason as a sufficient reason to dismiss.
“In this case, a professional has lost his livelihood at the latter end of his career as a result of falling short of the scrupulous attention to the processes of protection against money laundering which employers, the law and the well-being of the Island demands of all those in positions such as his. It is a sad but cautionary story.”
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