A Chief Executive of two insurance intermediaries has been prohibited from performing any function in relation to any regulated activity for dishonestly allowing each firm to misuse client monies and continuing to trade while insolvent. Funds from the client money accounts had been used as working capital to pay dividends, salaries and benefits such as cars. By 31 October 2005, the deficit to the client money accounts was £571,000. The firms went into administration on 2 February 2006. The Chief Executive was found to be the dominating influence on the firms and therefore responsible for the misuse of client monies.
View David Marriott Oliver, 1 December 2009
A director of a mortgage broker has had his approval withdrawn and been prohibited from performing any function in relation to any regulated activity for a lack of integrity for failing to take steps to prevent his firm from being used to commit mortgage fraud. The firm accepted business from an introducer without taking steps to verify it, despite obvious anomalies. The director also provided false and misleading information to the FSA during a Supervision visit. The firm’s permission was also cancelled due to a lack of human resources following the director’s prohibition in breach of Threshold Condition 4, and a failure to satisfy the FSA that it conducted its affairs soundly and prudently due to its connection with the director, in breach of Threshold Condition 5.
View Kevin Byrne, 10 February 2009
View Forest Financial Services Ltd, 10 February 2009
The FSA has fined a stockbroking firm which specialised in spread betting and share dealing £101,500 in respect of the poor sales practices of an appointed representative, in breach of Principles 3 (Management and Control), 6 (Customers’ interests) and 10 (Clients’ assets). The appointed representative failed to provide accurate and complete information regarding the risks associated with their recommendations and/or made misleading statements about the companies they were advising customers to invest in. The stockbroking firm had outsourced day-to-day compliance to a consultant without exercising appropriate oversight. Further it did not pay due regard to clear indications of financial difficulties on the part of the appointed representative. The FSA also identified issues in relation to the handling of client money.
View Direct Sharedeal Limited, 18 February 2010
The FSA has censured a stockbroking firm for poor sales practices in respect of high risk investments, giving rise to the risk of unsuitable sales, and failing to monitor advisers adequately, despite similar issues having been the subject of a £49,000 fine in 2007. A visit to the firm revealed a failure to implement a remediation programme, despite undertaking to do so and notifying the FSA that this had been done. The firm would have been fined £1.5 million had it not been in the process of winding down its business, the fact that it owed customer redress of £831,382 as at 14 January 2010 and was awaiting the outcome of a further 167 outstanding Financial Ombudsman Service complaints as at 31 December 2009. The firm’s Director and Compliance Director were also censured for lack of competence. They undertook not to hold senior responsibility functions in the financial services industry for 3 and 5 years respectively, resign from the controlled functions currently held and to resign from their directorships at the firm.