A Managing Director of a mortgage and general insurance broker which operated a network of Appointed Representatives (ARs) has had his approval withdrawn for lack of competence and capability involving breaches of Statements of Principle 5 and 7: he failed to manage and control the expanding network to acceptable standards and, as a result, weak systems and controls were exploited by some of the ARs to submit fraudulent mortgage applications and recommend unsuitable mortgage contracts. The director provided evidence that a financial penalty would threaten his solvency and thus avoided a fine of £30,000.

View FSA takes action against chief executive of mortgage network for poor controls over appointed representatives, 1 September 2009