SITTING at the head of a table in a drab conference room in the depths of the government’s Broad Street headquarters, and flanked by a pair of stern-faced advisers, Deputy Ian Gorst has the appearance of a man at war.

It has been a week since the Jersey Evening Post published a series of allegations about the Jersey Financial Services Commission, the finance regulator which, as External Relations Minister since 2024, Deputy Gorst has ultimate responsibility for.

The JEP’s investigation included interviews with dozens of individuals who claimed to have had their lives ruined by the organisation’s enforcement division, and highlighted the fact that, unlike many jurisdictions, there is no third-party appeal process to challenge decisions made by the regulator. As such, say critics, the JFSC is judge, jury and executioner: able to destroy careers and companies at will.

It is a power in which the JFSC has proved itself adept at wielding. Even those firms which have fought back find that they have won the battle and lost the war. In 2020, SWM Ltd, a wealth management firm, won a six-year court fight against the regulator.

Despite winning the case, SWM could not get professional indemnity insurance and was forced to close its doors.

The JEP was repeatedly warned off the story: “My advice is to drop this,” one former finance executive said. “They will ruin your life like they ruined mine” and the JFSC has refused to engage other than a brief written statement. The regulator has remained silent in the week since, other than a vague statement that said it took the reports “extremely seriously”. That silence, critics say, is fitting for an organisation that has always been unaccountable and remote.

But despite the similarities between this windowless government office, with its dual flags (British and Jersey) and bare walls, and a war room, Deputy Gorst is feeling conciliatory.

“The first thing to say is that I recognise the disquiet and concern which some of the individuals had reported and spokento you about,” he told the JEP.

“I don’t accept bullying in any way, shape or form, and some of the stories that you reported on gave the impression that those individuals felt that they had been bullied, and that’s not appropriate anywhere in any arm of government.”

One of the key areas highlighted in the JEP’s investigation was the lack of a formal right to appeal against JFSC sanctions, which can include financial penalties and often the use of public statements: a formal reprimand that is published on the regulator’s website and visible for the whole world to see. Many of those who spoke to the JEP had been subject to public statements and had been unable to work in the finance industry – or often, any industry – ever since.

In some cases, the use of public statements has been appropriate. In 2018, the JFSC sanctioned and issued a statement on Christopher Paul Byrne, who ran Lumiere Wealth. Byrne was jailed for seven years in November 2018 for running a high-risk fund that was described as a Ponzi scheme and in which at least 12 clients lost over £2.7 million.

But in many cases it has not. Advocate Olaf Blakeley told the JEP of a number of clients he had represented “who did nothing wrong”, and the JEP heard from several others who made relatively minor procedural errors and were subsequently issued with a statement. “It has been overzealous, and aimed its fire at members of the industry who are neither fraudsters nor people who fall below the standards,” Advocate Blakeley said.

One of the main issues was that the only way to oppose a JFSC sanction – including a public statement – was an appeal to the Royal Court, an expensive and time-consuming process that is beyond the means ‘ of many. It was this lack of recourse that led many in the industry to describe the regulator as “a law unto themselves” and as “judge, jury and executioner”.

Deputy Gorst told the JEP that he felt the use of public statements was important, even if they were controversial, as the fines issued by the JFSC tended not to be enough of a deterrent, whereas a public statement was genuinely impactful in our internet age. That said, the lack of a right to a third-party appeal was an issue, Deputy Gorst admitted, and would be addressed.

“You have brought [forward], again, the need to revisit the enforcement processes,” he said of the JEP reporting on the issue.

“[We will] look at other jurisdictions that do have appeals processes, which I think we can learn from. We’ll want to see how successful they are.”

Deputy Gorst said that the issue of a third-party appeals process would be added to the scope of the Strategic Review of Jersey’s Regulatory Environment, launched on the same day that MoneyVal’s assessment of the Island’s finance industry was published on 24 July and due to be completed in the second quarter of 2025.

“The government is undertaking a strategic review of the regulatory environment, and in that review, it will be including – and considering – your point, about a third-party appeals process within the enforcement procedures,” he said.

“It would seem to me that Jersey as a whole has probably moved on from [having only] a simple appeal to the Royal Court. It would seem to me that we will probably come forward with changes to that process.

“I think that we look back in hindsight and think it might have helped those individuals who feel that their lives [...] have been blighted and ruined by enforcementaction. If they had another course of action outside of the Royal Court, that might have gone some way to helping [them].”

A second revelation in the JEP investigation into the JFSC was the fact that, unlike in the UK, the regulator is not subject to the Freedom of Information Law, which gives the public the right to ask questions about its work and budget. The JEP highlighted last month that this exclusion comes despite a 2014 vote by the States Assembly to properly consider extending the ambit of the law to the JFSC and extending it to wholly-owned or majority controlled States entities, a decision that was never actioned.

Deputy Gorst said that he “was not opposed” to the JEP’s campaign to have the JFSC and other arms-length bodies added to the FoI law, although historically he had opposed it due to the lack of proper safeguarding for commercially sensitive activity.

“But I think if we could deal with that, then that will take away a lot of the opposition for having FoI extended to those bodies – [and] that would be a good thing,” he said.

Deputy Gorst cautioned, however, that there would be a cost associated with it that would be passed on to those who pay for the JFSC, namely businesses regulated by them.

He also commented on the frustration in the Island about a spate of recent data breaches from the JFSC that, in July, saw the information of 261 people with companies and trusts published due to an issue that occurred during system maintenance.

It was the second time in 2024 that the regulator had inadvertently published non-public information.

“I do understand the frustration of industry who feel that, had they had a data breach, the regulator would have taken a view about management of systems, management of data, which would have been tough,” he said.

But Deputy Gorst said that he had not yet seen the root-cause analysis of the breach, but “once we’ve seen [it], will be the time for us then to sit down again with the regulator and talk through what the implications are and how we move that forward to together”.

In general, the recent revelations about the JFSC in the JEP, Deputy Gorst said, have only heightened the need for the ongoing strategic review which, with hindsight, he said, “could have been undertaken earlier”.

He added, though, that the JFSC was independent from government and must remain so.

Mr Gorst said that he met the chair of the board of the JFSC “once a month” and the entire board more irregularly. “[We last met in] September, and we said then that we need to do that more frequently.” He said that while he doesn’t meet the director general, Jill Britton, regularly, “my officials meet her on a weekly basis”.

He said that the “gateways” by which theregulator was able to communicate with ministers “aren’t really clear enough”.

“The regulator holds more and more information about the financial services industry in Jersey [and] that aggregated data – on authorisations, on enforcement – can really help with trust and accountability,” he said.

“It also helps with [...] competitiveness: What are the trends that are happening and have we got the right products that clients are wanting? Are we registering enough Jersey companies?”

It sounds like Deputy Gorst is saying that it is time for the government to be more involved with the regulator than it has in the past? “Involved is a word that could mean different things to different people,” he said, adding that international standards prohibit too much government intervention in the regulator.

“I’m certainly looking to get more involved with whether we’ve got the right regulatory laws in place and how we are implementing that regulation.”

A criticism of many is that the JFSC does not effectively carry out its role as a critical friend to the finance industry and that, indeed, the regulator is the last place that firms or individuals would go to for advice.

But Deputy Gorst said that part of this remoteness was also the requirement of international standards and the way the Island is assessed under them.

“It’s become more difficult for a regulator to give advice in the way that they might have done ten years ago,” Deputy Gorst said.

“[But] I want us to get back to [having] a regulator that can help advise and understand firms and help us be more competitive.

I am working with the regulator to make sure that we move forward. I see it very much as hand-in-hand work, and that they and I are in it together.”

‘I’m certainly looking to get more involved with whether we’ve got the right regulatory laws in place and how we are implementing that regulation