Insights

Resigning To Avoid Disciplinary Action

You can run but you can’t hide

Members of professional regulatory bodies who are faced with disciplinary action often consider resigning membership or allowing membership to lapse.  The hope is that by doing so, the member will avoid having to face disciplinary action and its potentially adverse consequences, including negative publicity.

In some circumstances the member’s intention is to resign membership from one body prior to any disciplinary action, and register with another regulatory body with a clean slate. 

However, regulators are wise to avoidance tactics.  In order to prevent such a situation, regulators generally include provisions in their rules which either:-

  1. provides that notice of resignation or seeking removal from the register will not be accepted pending an investigation or disciplinary action; or
  2. provides that they have jurisdiction over former members.

The rationale in including such rules is to uphold regulation. Applications for membership of regulatory bodies usually include a question as to whether the applicant has been subject to any disciplinary action or order from another regulator.  In some cases if the order imposed by another regulatory is sufficiently serious, the regulator to whom application has been made may refuse the applicant membership.

 ACCA, ACA, ICPAI and CIMA have drafted rules which prevent members from avoiding disciplinary action:-

BODY RULE
ACCA (Association of Chartered Certified Accountants) 10(3) of Membership Regulations in the ACCA Rulebook 2016:
‘An individual’s notice of resignation or notice seeking removal from the member, affiliate or student register shall not be accepted, and the individual shall accordingly not cease to be a member or, as the case may be, an affiliate or a registered student, where a complaint in respect of him or of a relevant firm in relation to which he is a specified person has been received by the Association, or where disciplinary proceedings of the Association are otherwise pending against him or such relevant firm until such time as the matter has been finally disposed of and the amount of any fine or costs specified in a disciplinary order made in respect of him or such relevant firm has been paid in full’.
ACA (Association of Chartered Accountants) Bye Law 8.6 of the Disciplinary Bye Laws of Chartered Accountants in Ireland (Effective 5 October 2015)
'If, after a Disciplinary Matter comes to the attention of the Head of Professional Conduct, a Member, Student or Affiliate tenders his or her resignation such resignation shall not be effective until any or all proceedings arising from such Disciplinary Matter have concluded unless the Council in its absolute discretion decide otherwise'
ICPAI (Institute of Certified Public Accountants in Ireland) s.48(e) Memorandum of Association (as amended by special resolution passed on 29 April 2010)  of ICPAI
‘In the event of a Member, Firm, Affiliated Partner or Student resigning during the course of any disciplinary process or prior to the commencement of any disciplinary process but where a Complaint has been made the Institute may publish a statement that such a resignation has taken place together with a statement as to the existence of the complaint and/or a statement of fact that the disciplinary process was ongoing prior to the resignation. In any such statement the Member, Firm, Affiliated Partner or Student shall be named. In the event of such a resignation, details will also be recorded in the register of findings naming the Member, Firm, Affiliated Partner or Student’.
CIMA (Chartered Institute of Management Accountants) Bye Law 4(a) of the Byelaws and Regulations of CIMA on 31 July 2015
‘The Institute may terminate membership where a Member:- (i) resigns by writing to the Chief Executive (provided that such resignation will not be accepted if the Member is currently the subject of a complaint); or (ii) fails to pay a subscription or any other money owed to the Institute; or (iii) is found to have made a misleading or false statement in connection with admission to membership or has failed to disclose a relevant conviction or disciplinary sanction prior to admission to membership; provided that unless a person is notified by the Institute that this membership has been terminated, that person shall remain a Member’.

 

Accordingly, in circumstances where an investigation is commenced or disciplinary action is pending, the best course of action is to engage with your regulator.  Most regulators have a rule requiring members to co-operate in relation to an investigation or disciplinary action.  Failure to do so, can, of itself render a member liable to disciplinary action. 

Engaging is key and can mitigate against any sanction that may be imposed against you. 

For further information on this topic please contact Laura Graham at lgraham@reddycharlton.ie


Keywords: Publication, Laura Graham, Disciplinary

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