27 May 2026
On 31 March 2026, the High Court delivered a judgement by The Honourable Mr Justice Barniville in which he refused to confirm a Prohibition Notice (“the Notice”) issued by the Central Bank of Ireland (“CBI”) against CD (the “Respondent”). That Notice referred to a fitness and probity investigation carried out by the CBI against CD, who held a senior controlled function role in a Fund ManCo. Mr. Justice Barniville set the Notice aside on the basis of deficiencies in procedural fairness and declined to remit the matter to the CBI for reconsideration.
Under s.45(1) of the Central Bank Reform Act 2010 (the “2010 Act”), the CBI must apply to the High Court for consideration and/or confirmation of any Prohibition Notices served. In this case, the CBI had issued the Notice to CD on 22 February following an investigation under Chapter 3 of Part 3 of the 2010 Act. The CBI’s decision was that CD should be prohibited from carrying out “controlled functions” as per the 2010 Act for 3 reasons:
CD refuted these decisions and exercised their right to do so in the High Court with the responses that:
The CBI had to consider both arguments and the position under the Fitness and Probity regime to reach a final decision. In this article, we will look at the judgment and possible implications arising from it.
CD held a senior controlled function role in a Fund ManCo and in 2019, found they were the subject of a fitness and probity investigation. CD resigned from their position in early 2020, but the CBI continued its investigation and ultimately issued a Prohibition Notice barring CD from performing any controlled function under the 2010 Act for one year. The investigation came about as result of risk management concerns in certain sub-funds managed by the International ManCo, which were managed by a portfolio manager referred to as “GH” and who was subsequently fired for gross misconduct. When the CBI became aware of the issues involving the sub-funds, they initiated contact with the Irish Fund ManCo to establish if there was any awareness of the wider risk management complaints. This would eventually lead to the CBI issuing a notice of Investigation to CD as the holder of controlled functions in the Fund ManCo.
Prior to the CBI making a final decision, CD resigned from their position in the Funds ManCo. This resignation formed part of their argument against the confirmation of the Notice which the High Court had to take into account.
Under the 2010 Act, and as part of the Fitness and Probity regime, individuals who are performing controlled functions are required to meet the CBI’s standards of competence, integrity, and financial soundness. The Fitness and Probity regime allows the Central Bank to carry out its gatekeeper function, determines the make-up of a regulated firm’s senior management team, and can dictate whether an individual can continue to pursue a career in financial services. Where concerns arise, the CBI may request engagement with the individual, from pre-investigation to enforcement. That can culminate in the CBI taking an enforcement action and seeking confirmation of any prohibition in the High Court under s.45 of the 2010 Act.
The first argument progressed by CD was that the CBI should not have continued their investigation and ultimate prohibition as they had left their position, so could no longer be “performing” their controlled function role, and was therefore ultra vires. The CBI disputed this position, and the High Court agreed. Mr. Justice Barniville found that the case was not ultra vires and stated that the statutory scheme did not prohibit continuation of the process post-resignation. There was nothing blocking the CBI from continuing their investigation.
CD also argued that their fair procedures had been breached throughout the investigation and cited four particular arguments to support that assertion:
The High Court examined the points raised by CD and ultimately found that there were breaches as set out above. The CBI did not follow up with interviews as per points (i) and (ii), did not offer an oral hearing and at the final meeting, asked for submissions but did not move to take evidence off them. The finding by the CBI had serious professional and personal implications for CD, and the High Court found that the investigation and decision-making process were “irretrievably tainted” by procedural unfairness. Following this finding, the Prohibition Notice could not be regarded as a lawful and fair exercise of the CBI’s statutory power. As the one-year prohibition had passed, the High Court declined to remit the matter to the CBI.
The High Court refused the CBI’s application to confirm the Notice and thus set the Notice aside. While the Court acknowledged that the CBI had jurisdiction to continue its fitness and probity investigation after CD’s resignation, the fundamental procedural defects in the conduct of the investigation and decision-making process meant that the Notice could not stand.
In light of the expiry of the one‑year prohibition period, the impact on CD, and the particular circumstances of the case, the Court also declined to remit the matter to the CBI for reconsideration.
This decision underscores two key points for regulators and regulated persons alike:
Any party engaging with the CBI in an investigation or enforcement action, should approach those engagements with the necessary understanding of the relevant legal issues, including the operation of the principles of natural justice, and the requisite level of preparation and expert professional support.
Experienced lawyers from KPMG Law LLP’s Financial Services Regulation team can provide firms and individuals with confidential legal advice on these issues. If you have any regulatory or enforcement requirements or expectations, please do not hesitate to contact our team below.
