News August 2017 James Rakow sanctioned in disciplinary case relating to Equity Syndicate Management Limited

James Rakow sanctioned in disciplinary case relating to Equity Syndicate Management Limited

10 August 2017

PN 41/17 

The outcome of the disciplinary case relating to Mr James Rakow, an associate partner with Deloitte LLP, in connection with his provision of actuarial services to Equity Syndicate Management Limited (ESML) and Syndicate 218 in respect of the financial years ending 31 December 2007, 2008, and 2009, has today been announced by the Financial Reporting Council (FRC).

Mr Rakow, who is a member of the Institute and Faculty of Actuaries (IFoA) admitted misconduct in relation to the 2008 and 2009 years. His conduct fell significantly short of the standards reasonably to be expected of a member of the IFoA. As a result of his admitted failings, he was not in a position to sign, and therefore ought not to have signed, the 2008 and 2009 Statements of Actuarial Opinion in relation to Syndicate 218. There was no finding of any misconduct in relation to the 2007 year.

Mr Rakow agreed to the following terms of settlement:

  • A fine of £75,200;

  • A Severe Reprimand; and

  • A sum of £400,000 to be paid as a contribution to the Executive Counsel’s costs.

The case relating to KPMG LLP, Mr Mark Taylor, Mr Anthony Hulse and Mr Douglas Morgan is still ongoing.

Read or download Mr James Rakow - Formal Complaint (PDF) and Mr James Rakow - Settlement Agreement (PDF). 

Notes to editors:
1. The Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.  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.

2. In relation to enforcement 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

  • Investigation

  • Decision whether to bring enforcement proceedings and, if so decided, referral to Disciplinary Tribunal

  • Tribunal hearing

  • Determination and imposition of sanction and/or costs orders

The FRC can start a disciplinary investigation in one of two ways: (i) the professional body 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.

The criteria are specified in the disciplinary Schemes:

 A Member… shall be liable to investigation ….only where, in the opinion of the Conduct Committee (a) the matter raises or appears to raise important issues affecting the public interest in the United Kingdom and (b) there are reasonable grounds to suspect that there may have been Misconduct….

Investigations are conducted by Executive Counsel and the Enforcement division.

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