IN1173

t
os
A Costly Train Journey (B)

rP
yo
op
tC
No

03/2015-6119

This case was written by Elin Williams, under the supervision of N. Craig Smith, the INSEAD Chaired Professor of
Ethics and Social Responsibility. It is intended to be used as a basis for class discussion rather than to illustrate either
effective or ineffective handling of an administrative situation.
Do

Additional material about INSEAD case studies (e.g., videos, spreadsheets, links) can be accessed at
cases.insead.edu.
Copyright © 2015 INSEAD
COPIES MAY NOT BE MADE WITHOUT PERMISSION. NO PART OF THIS PUBLICATION MAY BE COPIED, STORED, TRANSMITTED, REPRODUCED OR DISTRIBUTED IN
ANY FORM OR MEDIUM WHATSOEVER WITHOUT THE PERMISSION OF THE COPYRIGHT OWNER

This document is authorized for educator review use only by HAROON UR RASHID KHAN, King Abdulaziz University until Apr 2021. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 t
The story told in “A Costly Train Journey (A)” is mostly fiction. However, it is similar to the

os
experience of Jonathan Burrows, a Managing Director at BlackRock Asset Management
Investor Services, in some important respects. Like Jon, Burrows was caught evading
payment of his commuter train fare in the way described in November 2013, and he settled
with the rail company by paying £43,000.

However, that was not the end of the story for him.

rP
Burrows had avoided prosecution, but the affair aroused the wrath of the railway workers’
unions, and thus came to the attention of the British tabloid press in April 2014. Manuel
Cortes, leader of the Transport Salaried Staff Association, told the BBC:

The rich seem to be able to walk away and claim secrecy while the poor get
hauled up in front of the local magistrates court and publicly ridiculed. This guy

yo
can buy silence, but that isn’t offered to most people who are caught fare
dodging.

There was a public outcry over “Britain’s worst fare dodger” and the fact that he worked in
finance. The Financial Conduct Authority (FCA), the body that regulates the UK financial
services industry, began investigating. As soon as BlackRock found out about the inquiry,
Burrows was suspended from his job and he promptly resigned. When the press revealed
Burrows’ identity (along with his million pound salary) in August 2014, a spokesperson for
op
the firm said: “Jonathan Burrows has left BlackRock. What he is alleged to have done is
totally contrary to our values and principles.”

Within a few short months Burrows was banned from working at a senior level in financial
services (see Exhibit for excerpts from the ruling by the FCA). Union boss Manuel Cortes
was interviewed again and said: “What about all those corrupt bankers that have brought our
tC

economy to the edge of the abyss? They’ve never dealt with any of them.”

The Financial Conduct Authority regularly bans people from working in the industry for
failing its “fit and proper” test. However, Burrows was only the third person to have been
banned for conduct outside of his job. The previous two individuals had lied in court, both in
cases connected to the industry.

In a statement to the press, Burrows said:

No

I have always recognised that what I did was foolish. I have apologised to all
concerned and reiterate that apology publicly today. The settlement I made with
Southeastern in March 2014 was for an amount significantly in excess of the
value of the fares not paid by me on the small number of occasions that I failed to
pay. Indeed the size of the settlement could be said to have led to a distorted
perception of the scale of my wrong-doing. However, that does not change the
fact that what I did was wrong, and I accept that. While I respect the FCA’s
decision today, I also regret it, coming as it did after a 20-year career in the City
Do

that was without blemish. I recognise that the FCA has on its plate more profound
wrong-doing than mine in the financial services sector, and I am sorry that my
case has taken up its time at this critical juncture for the future of the City and its
reputation.

Copyright © INSEAD 1

This document is authorized for educator review use only by HAROON UR RASHID KHAN, King Abdulaziz University until Apr 2021. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860
 t
Exhibit

os
Excerpts from a Ruling by the Financial Conduct Authority

FINAL NOTICE
To: Jonathan Paul BURROWS

rP
Date: 15 December 2014
1. ACTION
1.1 For the reasons given in this Notice, the Authority hereby makes an order (..) prohibiting Jonathan Paul
Burrows from performing any function in relation to any regulated activities (…)
2. SUMMARY OF REASONS
2.1 Mr Burrows has admitted that, on a number of occasions, he deliberately and knowingly failed to purchase a
valid ticket to cover his entire journey whilst travelling on the Southeastern train service between Stonegate
Railway Station, East Sussex, and Cannon Street Station, London.

yo
2.2 Based on Mr Burrows’ admission, the Authority considers that Mr Burrows is not fit and proper to conduct
any function in relation to any regulated activity (…), because he lacks honesty and integrity.
4. FACTS AND MATTERS
4.1 At the time he engaged in the fare evasion, Mr Burrows was employed by Blackrock Asset Management
Investor Services Limited as a Managing Director.
4.2 On 19 November 2013, Mr Burrows (…) was found to have failed to purchase a valid ticket for his journey
into London from Stonegate Railway Station. Mr Burrows was interviewed under caution and admitted to
evading his rail fare on a number of occasions.
op
4.3 On the occasions on which Mr Burrows failed to purchase a valid ticket he boarded the London bound train
at Stonegate, a rural station with no barriers, without purchasing a ticket. Once he had arrived in London he
exited through the barriers at Cannon Street Station by “tapping out” using an Oyster travelcard, paying the
maximum fare of £7.20 rather than purchasing the required ticket for £21.50.
4.4 (…) Mr Burrows admitted to the Authority that he had evaded his train fare on a number of occasions and
had done so in the knowledge that he had been breaking the law. The Authority does not consider that this
is fit and proper behaviour for an approved person.
4.5 Mr Burrows also admitted in interview that he did not disclose his behaviour to his employer. Although the
tC

Authority is not penalising Mr Burrows for not informing his employer of the circumstances outlined
above, the Authority has taken this, amongst other things, into account in deciding what action to take.
5 FAILINGS
5.1 By knowingly evading the fare for his train journey on a number of occasions Mr Burrows has
demonstrated a lack of honesty and integrity and, as such, he has failed to meet the FCA’s Fit and Proper
Test for Approved Persons.
6 FACTS AND MATTERS
No

6.1. For the reasons set out above, the Authority has concluded that it is both necessary and appropriate to
prohibit Mr Burrows from performing any function in relation to any regulated activity (…) to secure an
appropriate degree of protection for consumers and to protect and enhance the integrity of the UK financial
system.
6.2. Those individuals who are approved to work within the financial services industry should conduct
themselves with honesty and integrity in both their professional and personal capacities. As Mr Burrows
held a senior position within the financial services industry and was an approved person, he should have
been a role model for others and his conduct has fallen short of the standard expected for someone in his
position.
Source: http://www.fca.org.uk/static/documents/final-notices/jonathan-paul-burrows.pdf (accessed 23 January
2015).
Do

Copyright © INSEAD 2

This document is authorized for educator review use only by HAROON UR RASHID KHAN, King Abdulaziz University until Apr 2021. Copying or posting is an infringement of copyright.
Permissions@hbsp.harvard.edu or 617.783.7860