Speaking to delegates at the Jersey International Business School’s crime symposium, Barry Faudemer described the level of money owed in the Island as ‘quite staggering’ and fuelled by a ‘need to live a certain lifestyle’.
Mr Faudemer said: ‘The debt of individuals is driving bad behaviour and this is is something we have got to get a handle on.
‘If someone has a fantastic lifestyle, you need to ask how they are funding it and what is the debt level.’
Turning to other enforcement considerations following from last year’s Council of Europe Moneyval assessment, he said the regulators were continuing to see examples of whole groups of retired people who had lost their life savings after putting their trust in third parties who had mis-sold them inappropriate products.
‘This is a real problem – there are still a small number of individuals – bad dudes – who are taking up a disproportionate amount of our time. People are turning up at the Commission before going to the police and telling us how they feel they were misled.’
Mr Faudemer said that mis-selling of funds that had come to light last year was a disaster that could have been avoided, had sufficient due diligence been carried out. He added that potential conflicts of interest were a major concern. ‘If you are debating whether or not there is a conflict of interest, treat it as if there is one,’ he advised.
In line with the Moneyval recommendations, a new Economic Crime and Confiscation Unit has been set up this year and is due to start work next year, following a budget allocation of £870,000 approved by the States Council of Ministers in May. The unit will provide specialist complex case investigation capability within the Attorney General’s Department.
Mr Faudemer said that most of the staff had now been appointed to the unit, which he described as an ‘interesting development’.
Asked whether the issuing of public statements by the regulator – published on the website jerseyfsc.org – was sufficiently effective as a penalty, he said that a public warning could be catastrophic for a business, as well as for an individual barred from working in finance unless they had the regulator’s permission.
The former policeman said those brought to book by the Commission were more willing to accept sanctions other than a public statement. ‘When I joined the JFSC eleven years ago I thought people needed to be doing porridge, but I have since realised that the public statement is key,’ he said.
