Penalty reduction for compliance lapses where COVID-era operational and plausible explanations justified partial relief.

Operational lapses in certification, agreement compliance, inward processing, investor request processing, and destruction-record maintenance were considered in light of the COVID period and related difficulties. Although the director had not obtained the requisite certification during the inspection period, that explanation was treated as plausible. The surrounding procedural defects, including delays in issuing duplicate certificates, transmission requests, change of address requests, and bank account detail changes, did not justify retaining the full monetary penalty. The penalty was therefore reduced, granting only partial relief.

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Issues: Whether the penalty imposed for alleged violations relating to certification requirements, agreement compliance, inward processing, delay in processing investor requests, and maintenance of destruction records called for interference and reduction.

Analysis: The appellant's director had not obtained the requisite certification during the inspection period, but the explanation that the default occurred in difficult circumstances was found plausible. The other lapses, including defects in agreements, inward processing, delays in issuing duplicate certificates, transmission requests, change of address requests, bank account detail changes, and maintenance of destruction records, were assessed in the backdrop of the COVID period and the surrounding operational difficulties. The record did not justify retaining the original monetary penalty in full, and the ends of justice were considered better served by reducing the penalty.

Conclusion: The appeal succeeded only to the extent of reduction of penalty, and the appellant obtained partial relief.

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