FSA has fined and banned a mortgage broker and fined his partner. It fined the firm’s principal £100,000 and banned him for exposing around 1,500 customers to possibly unsuitable advice and fined his junior partner £7,000 for exposing around 750 customers to potentially taking an unsuitable mortgage. It found Stephen Jones had also provided false information in support of his own mortgage application and encouraged customers to sign backdated fact finds before an FSA visit. So, he was both fined and banned for breach of APER Principles 1, 4 and 7. FSA found the partnership, run from different offices, was dysfunctional. It considered the failings of Simon Poole, the junior partner, less serious so merely fined him for breach of Principle 7 for failing to record suitability assessments or implement changes a compliance consultant suggested. Mr Poole has since got authorisation as a sole trader. FSA also publicly censured two directors of another mortgage firm, for various breaches, including:
- failure to ensure the firm put in place appropriate written sales and compliance procedures and follow them;
- not completing a past business review within a reasonable timescale and therefore not identifying customers who might have been mis-sold mortgages and were entitled to redress;
- failure to ensure that their compliance department had enough experienced and qualified staff; and
- not properly controlling spending on staff salaries and diverting funds away from compliance.
The firm in question went into administration and both directors into bankruptcy. Otherwise, FSA would have fined them £150,000 each.