The Guernsey court has dismissed a PCC Director’s appeal against GFSC sanctions.

The Royal Court dismissed a PCC Director’s appeal against the GFSC on 21 November 2024. Lieutenant-Bailiff Hazel Marshall KC's judgment involved the case of Nicholas Walton Hofgren and the Guernsey Financial Services Commission (GFSC).  The judgment dismissed Mr. Hofgren’s grounds of appeal against the GFSC.

• https://www.guernseylegalresources.gg/CHttpHandler.ashx?documentid=86143

The Appeal was against the GFSC’s imposition of a financial penalty and prohibition order on Mr Hofgren, the former CEO of GFG Limited (“GFG”), an investment management company, on the grounds of alleged errors of fact, errors of law, unreasonableness, and disproportion.   Mr Hofgren has been an Executive Director of GFG Limited (“GFG”) at all material times and since its inception. He was and is the joint ultimate beneficial owner and controller with Mr Cheek. The GFSC also sanctioned GFG.

GFG was incorporated on 4 March 2014 and was licensed by the Commission on 19 March 2013 under the Protection of Investors (Bailiwick of Guernsey) Law 1987. It was initially owned by the GFG Trust, of which Mr Hofgren and two others were beneficiaries, but in March 2017, this was reduced to Mr Hofgren and one other (Mr Cheek). They have thus been its ultimate equal beneficial owners at all material times. In 2018, GFG Group Ltd was inserted between GFG and the GFG Trust, but this did not change the ultimate beneficial ownership.

Mr Hofgren was an Executive Director of GFG from 4 March 2014 until he was removed (by a legitimate process) by GFG’s other directors on 9 October 2019. Seven other directors and non-executive directors were involved in GFG during various periods from its inception until after Mr Hofgren’s departure and beyond. Six of these have “apparently” been issued a PRIVATE REPRIMAND from the Commission for their respective roles in the matters that the Commission criticises about GFG’s business conduct.

Mr Hofgren, by contrast, was made the subject of the more severe sanctions, along with GFG itself. The reason for this is that he was apparently considered to be the central and leading protagonist in the relevant matters and therefore justifiably sanctioned to a greater extent, and indeed a very much greater extent, than his sometime co-directors

Mr Hofgren is an American citizen and is not a Guernsey resident; he lives in London.

The GFSC welcomed this decision, which upheld their actions and dismissed the appeal. They plan to issue a public statement soon regarding this matter.

• https://www.gfsc.gg/news/nicholas-walton-hofgren-and-guernsey-financial-services-commission.

Sources

https://www.gfsc.gg/news/nicholas-walton-hofgren-and-guernsey-financial-services-commission.

https://www.guernseylegalresources.gg/CHttpHandler.ashx?documentid=86143