Complaints Commissioner Sir Anthony Holland castigated the regulator’s staff for allowing their relationship with the officer to “deteriorate” during the visit in September last year.
The unnamed complainant had accused the FSA representatives of “bullying behaviour”.
Holland said he believed the officers did not, but should have, carried out the visit with a “more-than-usual degree of sensitivity”, referring to a previous TCF assessment on which the firm and the FSA had disagreed.
On that occasion, the firm said the TCF officer had initially decided the firm passed the assessment, but later changed her mind and said it had failed.
In an email to the FSA following the September visit, the complainant alleged the FSA staff engaged in “bullying behaviour” and communicated “incorrect statements” to the officer related to the scope of the assessment.
Holland, who said he was relying to a large degree on hearsay as there has been no official investigation into the conduct of the FSA officers, criticised the regulator.
The Complaints Commissioner writes: “Unfortunately I was not present at the TCF assessment, so on the face of it, it is difficult for me to comment directly upon what was said by whom and more importantly the manner in which the comments were made by both you and the FSA assessors.
“This is because my investigations are paper-based and do not involve hearings based on sworn testimony including adversarial cross examination.
“Having said this, it is clear that a situation was allowed to develop whereby the relationship between you, the FSA assessors and the firm being assessed deteriorated to an unacceptable level.”
“FSA staff should do their utmost, however difficult that may be, and I realise that sometimes that may be very difficult indeed, to ensure positively that supervision visits are conducted in a professional manner and that relationships are not allowed to deteriorate.”
In its response the FSA said: “We welcome the fact that the Commissioner has limited the scope of his investigation to the manner in which the visit was conducted.
“We note that the Commissioner has upheld the complaint on this limited basis. The Commissioner has not made any recommendations to the FSA nor has he suggested that the FSA take any remedial action.
“However, the FSA will be writing to the complainant to offer an apology for the way in which the Commissioner has found that the visit was conducted.”
