Hearing regarding KPMG and members relating to Equity Syndicate Management Limited and Syndicate 218
31 October 2017
A hearing of the Disciplinary Tribunal of the Financial Reporting Council ("FRC") will commence on Monday 27 November 2017 at 10.00 am
to consider a Formal Complaint against (1) Douglas Morgan, a former finance director of Equity Syndicate Management Limited ("ESML") and a member of CIMA, (2) KPMG, a member firm of the ICAEW, (3) Mark Taylor, a partner of KPMG and a member of the ICAEW and Anthony Hulse, a former partner of KPMG and a member of the ICAEW.
The hearing venue is The International Dispute Resolution Centre Limited, 70 Fleet Street, London EC4Y 1EU.
The Formal Complaint concerns:
- Mr Morgan's role in relation to ESML's claims reserving process in the financial reporting years ending 31 December 2007, 2008 and 2009 and the provisions for outstanding claims included in the financial statements for those years of Syndicate 218, a Lloyds Syndicate;
- The conduct of KPMG and Mr Taylor (for the financial reporting years ending 31 December 2008 and 2009) and Mr Hulse (for the financial reporting year ending 31 December 2009) in relation to the audit of the financial statements of Syndicate 218 for those years.
It is alleged that the conduct of Mr Morgan, KPMG, Mr Taylor and Mr Hulse fell significantly short of the standards reasonably to be expected of a Member firm and a Member.
The hearing relates to the investigation notified in AADB Notice PN 45 of 2012 and the delivery of a Formal Complaint in relation to Mr Morgan, KPMG, Mr Taylor, and Mr Hulse.
Notes to Editors:
- The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting transparency and integrity in business. The FRC sets the UK Corporate Governance and Stewardship Codes and UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the Competent Authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality.
- In relation to disciplinary matters, the FRC is the independent, investigative and disciplinary body for accountants and actuaries in the UK dealing with cases which raise important issues affecting the public interest. In brief, the stages of the disciplinary process are:
- Decision to investigate
- Decision whether to bring disciplinary proceedings against a member firm or member and, if so decided, referral to Disciplinary Tribunal
- Tribunal hearing
- Determination and imposition of sanction and/or costs orders
3. The FRC can start a disciplinary investigation in one of two ways: (i) the professional bodies can refer
cases to the FRC; and (ii) the FRC may decide of its own accord to investigate a matter. The Conduct
Committee will consider each case identified or referred to it and decide whether or not the criteria for an
investigation are met. Investigations are conducted by Executive Counsel and the Enforcement Division.
If disciplinary proceedings are commenced, Executive Counsel delivers a Formal Complaint to the
Conduct Committee. The Conduct Committee then instructs the Convener to appoint a Disciplinary
4. Formal Complaints filed following an investigation are heard by an independent Tribunal which will
normally sit in public. If the Tribunal upholds a Formal Complaint, there is a wide range of sanctions
which it can impose including an unlimited fine, exclusion from membership of a professional body
covered by one of the Schemes and withdrawal of practising certificates or licences.