Blend Training — Case File NFM-2024-001

The Reference

FCA Non-Financial Misconduct Scenario
📋 FCA FG20/1 · SM&CR · COCON · SYSC 22

A senior portfolio manager stands accused of sustained bullying. Three complainants. Eighteen years of tenure. Eleven million pounds of P&L. You are Head of Compliance. The investigation starts now.

The Complaint Arrives

Monday, 07:43

CF
Case File
Narrator
A formal complaint has landed on your desk. Marked CONFIDENTIAL — FOR HEAD OF COMPLIANCE ONLY. Three junior analysts. One senior portfolio manager. Eighteen years of tenure.
Sarah Okonkwo
Sarah Okonkwo
Head of Compliance — You
Three corroborating accounts. Independent of each other — they were interviewed separately. Specific dates, specific language. This is credible on its face. And under FCA FG20/1, non-financial misconduct is within scope for fitness and propriety. This isn't just an HR matter.
CF
Case File
Narrator
David Mercer is a Senior Manager under SM&CR. His desk generated £11.2 million last year. He has been at Vantage Capital for eighteen years. In that time, no formal complaints. Until now.
📋 FCA FG20/1 — Non-Financial Misconduct 📋 SM&CR — Senior Managers Regime
Activity — Email Priority Ranking

Morning Inbox

Five items require attention. Rank them 1–5 by priority (1 = most urgent). The complaint and your SM&CR obligations cannot be displaced by routine items. Over-flagging or under-flagging will affect your FCA Compliance score.

Priority assigned to: 0 of 5 emails
Activity — Internal Monologue Toggle

Priya's Account

You are reading Priya Sharma's formal statement. She has been precise and controlled. Toggle the internal monologue to understand what she is not saying aloud.

Priya Sharma
Priya Sharma
Priya Sharma
Junior Analyst — Formal Statement

The team meetings on 14 January and 6 February. Mr Mercer singled me out both times in front of the full team. He described my analysis as "embarrassingly thin" and suggested I "consider whether this role is the right fit."

On 6 February he told the team that if our numbers didn't improve, "some of us" would be finding out what the job market looks like. He was looking directly at me when he said it.

I've kept a log of dates and specific language. I can provide this.

Inner Monologue — What Priya Is Not Saying

She has the log. Every date. Every word. She went home and typed it up the same night because she knew no one would believe her without it. She's been preparing this for two months.

She told no one else at the firm. She was afraid Mercer would find out and make her life impossible before she could formalise it.

She is not going to cry in this interview. She decided that before she came in. She is going to be completely precise.

📋 FCA FG20/1
Activity — Internal Monologue Toggle

David's Account

Now read David Mercer's formal response to the initial complaint notification. Toggle to see what lies beneath his measured corporate language.

David Mercer
David Mercer
David Mercer
Senior Portfolio Manager — Formal Response

My management style is direct. It has always been direct. I hold my team to high standards and I make no apology for that — that's why our desk performs.

I have no recollection of singling out Ms Sharma specifically. In team meetings I address the team. If my words were taken personally, that reflects the current climate more than my intent.

I've had no formal complaints in eighteen years. I think that speaks for itself.

Inner Monologue — What Mercer Is Not Saying

He does remember exactly what he said. He also knows that three people have gone to HR in the past two years. He does not connect these facts.

He genuinely does not believe what he did was bullying. This is not performance. He has always operated this way and has always been rewarded for it.

He is already thinking about whether this is a discrimination claim. He is already preparing to fight it.

📋 COCON — Conduct Rules
Decision 1 of 3

Investigation Approach

Catherine Wells
Catherine Wells
Catherine Wells
Head of HR
You've reviewed the initial accounts. How do you want to proceed with the formal investigation? I need your guidance on structure and appointment.
⚖️
+12 — Strong Framework
Full independent investigation — appoint external investigator, freeze related HR actions, formal documentation protocol
🏢
+2 — Internal Process
Internal HR investigation — HR leads, compliance advises, no external appointment
🤝
−12 — Process Failure
Informal resolution first — direct conversation between Mercer and HR before escalating to formal process
📋 FCA FG20/1
Consequence — Investigation Approach

Outcome

Investigation initiated
Activity — Risk Matrix 2×2

Behaviour Assessment

Place each of the four documented behaviours in the correct quadrant of the Severity × Pattern matrix. This determines which conduct rules are engaged and whether fitness and propriety is in question. Click a behaviour card, then click the quadrant to assign it.

Public humiliation in team meetings (14 Jan & 6 Feb, corroborated by 2 witnesses)
Exclusion from client pitch prep following performance challenge (10 Jan, single incident)
Dismissive tone in one-to-one feedback sessions (informal reports, no dates)
Failure to escalate team resourcing issue affecting analyst workload (process failure)
↑ SEVERITY HIGH
Serious — Conduct Rule Breach
Critical — Fitness & Propriety
Manage — Training / Coaching
Monitor — Pattern Emerging
← Isolated
Sustained →
Pattern →
📋 FCA FIT 1.3 — Fitness & Propriety
Activity — Conversation Replay

The Team Meeting — 6 February

Flag each line you believe constitutes misconduct under FCA COCON. There are 4 genuine issues in this transcript. Over-flagging is penalised (−2 per incorrect flag).
Lines flagged: 0
📋 FCA COCON 2.1 — Individual Conduct Rules
Decision 2 of 3 — FCA Form C

Notify the Regulator?

Sarah Okonkwo
Sarah Okonkwo
Head of Compliance — Your Assessment
Investigation findings are substantive. David Mercer is a Senior Manager under SM&CR. FCA Form C notification is required when a firm has information suggesting a Senior Manager is not fit and proper — regardless of whether they've resigned. Mercer hasn't resigned. But the evidence is on my desk. Do I notify now?
📮
+14 — Proactive Notification
File Form C now — the firm has information suggesting unfitness; notification obligation is triggered regardless of departure
⏳
−5 — Delayed Notification
Wait until investigation concludes — notify only if findings confirm unfitness and Mercer departs
⚖️
+0 — Legal Advice First
Seek external legal advice before any FCA notification — put process on hold pending counsel review
📋 FCA SUP 10C.14 — Form C Notification
Consequence — FCA Response

FCA Response

Regulatory notification outcome
Activity — Fill-in-the-Blank Document

Drafting the Reference

Under FCA SYSC 22, regulatory references must be complete and accurate. You must not omit material facts or downgrade findings. Select the correct option for each blank.

Regulatory Reference — Confidential
Vantage Capital Investment Management / David Mercer SM&CR Case
Section 1 — Fitness Assessment
Vantage Capital Investment Management has assessed David Mercer and has to be fit and proper for the Senior Manager function he held.
Section 2 — Conduct Findings
During his tenure, the firm relating to his treatment of junior colleagues.
Section 3 — Disciplinary Outcome
The conduct investigation resulted in .
📋 FCA SYSC 22 — Regulatory Reference
Decision 3 of 3 — Final Outcome

The Mercer Outcome

Catherine Wells
Catherine Wells
Catherine Wells
Head of HR
Investigation findings are on your desk. The board is asking for a recommended outcome for Mercer's employment. Your recommendation must reflect the evidence quality and the regulatory position. What do you recommend?
⚖️
+12 — Summary Dismissal
Summary dismissal for gross misconduct — sustained, deliberate bullying with evidence of pattern across multiple incidents
📋
+8 — Negotiated Settlement
Negotiated settlement with Form C notification and complete regulatory reference — Mercer exits under compromise agreement
⚠️
−6 — Final Warning
Final written warning with mandatory coaching — retain Mercer with enhanced monitoring
📋 FCA FG20/1
Epilogue — Six Months Later

The Aftermath

Sarah Okonkwo
Sarah Okonkwo
Head of Compliance — Internal Monologue
The case is closed.
Six months on
Case Closed — FCA Non-Financial Misconduct

Investigation Complete

CASE CLOSED
0
Score — Investigation Quality

Case Metrics

FCA Compliance
0%
Procedural Integrity
0%
Duty of Care
0%

Your Decisions

Key Learning

FCA FG20/1 explicitly includes bullying and harassment within scope of fitness and propriety — this is a regulatory matter, not just an HR matter
Form C notification is required when the firm has information suggesting unfitness — not only when the individual has departed
Regulatory references must be complete and accurate — downgrading formal complaints to 'informal feedback' is a breach of SYSC 22
Independent investigation protects evidence integrity — internal processes under seniority pressure produce weaker evidence
📋 FCA FG20/1 📋 Form C — SUP 10C.14 📋 SYSC 22 📋 FIT 1.3 📋 COCON
Case Closed — With Process Gaps

Investigation Complete — Caveats

CASE CLOSED — REVIEW REQUIRED
0
Score — Investigation Quality

Case Metrics

FCA Compliance
0%
Procedural Integrity
0%
Duty of Care
0%

Your Decisions

Key Learning

An internal investigation under seniority pressure produces weaker evidence — when the stakes are high, the process must match them
Form C timing matters — having the right outcome delayed by process uncertainty is still a compliance weakness
Regulatory references drafted under settlement pressure carry legal and regulatory risk if they downplay findings
📋 Form C — SUP 10C.14 📋 SYSC 22 📋 FCA FG20/1
Case Open — Ongoing Liability

Multiple Failures

CASE OPEN — REGULATORY EXPOSURE
0
Score — Investigation Quality

Case Metrics

FCA Compliance
0%
Procedural Integrity
0%
Duty of Care
0%

Your Decisions

Key Learning

Informal resolution of a formal complaint in a regulated environment exposes both the firm and the complainants to significant harm
Failing to classify conduct accurately leads to outcomes that are disproportionate to the real regulatory risk
A misleading regulatory reference is not a kindness — it is a breach of SYSC 22 that transfers liability to the next employer and potentially the individual
📋 FCA FG20/1 📋 Form C 📋 SYSC 22 📋 COCON 📋 FIT 1.3