FCA bars ex-HSBC banker Joseph Molloy from finance over a £5,911 train-fare fraud

Spread across at least 740 journeys, £5,911 comes to no more than about £8 a trip ^[16]. The judge focused on how the fraud was done. "In my judgement, this is a high culpability," the judge said, according to the FCA notice. "It is sophisticated, with considerable planning, conducted over a period of almost 12 months." ^[7] The judge said that although Molloy was "clearly in a financial position to pay the fares, you decided to evade them and that causes a loss to the whole of society." ^[8]

The court's money orders come to £5,337: £5,000 in compensation to Southeastern, £150 in costs and a £187 victim surcharge ^[17]. The compensation covers all but £911 of the fares the railway lost ^[18]. The 10-month prison term was suspended for 18 months ^[6]. According to the notice, his difficult personal circumstances, his decision to stop of his own volition and his genuine remorse shaped both the length of the term and the suspension ^[9].

The FCA judged the same conviction by a different standard. It can ban anyone who does not appear to be "a fit and proper person". It counts honesty, integrity and reputation among its most important considerations and gives "particular consideration" to convictions for dishonesty and fraud ^[11]. The fraud ran while Molloy held certified functions ^[12]. "Mr Molloy's conviction demonstrates a clear and serious lack of honesty and integrity such that he is not fit and proper to perform regulated activities," the notice says ^[10].

One reading is that the amount barely matters, so any personal dishonesty puts a certified role at risk. A second is that conduct outside the job reaches the FCA once a court has made it a fraud conviction, the category the regulator singles out ^[11]. The third is that this was the easiest prohibition the FCA could make, against a defendant who pleaded guilty ^[5], let the 28-day tribunal window pass ^[13] and told the regulator he "accepts that he fell below the standards of behaviour expected by the Authority" ^[14]. I think the second reading fits the record best, and the third limits how far a firm can generalise from it. An FCA ban for personal dishonesty that never reached a criminal court would show that view is too narrow.

For a compliance team, the point the record supports is specific. A fraud conviction for dishonesty on a banker's commute, for under £6,000, was enough for a bar from "any function in relation to any regulated activity carried on by an authorized person, exempt person or exempt professional firm" ^[2]. HSBC did not respond to Fortune's requests for comment, and the FCA referred Fortune to the notice ^[15]. The record therefore does not show when the bank learned of the case or whether its own checks picked it up. The FCA issued its decision notice 167 days after sentencing ^[19].