The FSA has banned and fined an adviser £335,204 after he deliberately retained premium payments which should have been paid to insurers.
Donald Morgan Insurance Services partner Donald Morgan should have paid the premiums via his network between 2005 and 2010.
The FSA found that Morgan deliberately manipulated DMIS’s computer systems and falsified monthly reports to hide what he was doing from the network, which the FSA has not named.
It says although clients did not suffer, the network suffered financial loss as a direct result of Morgan’s actions.
Morgan and his wife Janet, also a partner at DMIS, have been banned from carrying out regulated activities.
The FSA says Mrs Morgan failed to take reasonable steps to inform herself about the affairs of DMIS, and failed to satisfy herself that the business was meeting regulatory rules.
The regulator says: “The FSA considers Mr Morgan’s conduct to be extremely serious because it demonstrates a lack of honesty and integrity. Mr Morgan abused the trust and confidence placed in him by clients and other firms. The action against Mr Morgan supports the FSA’s statutory objectives to reduce financial crime, maintain market confidence and protect consumers.”
In November, the FSA banned and fined Key Mortgage Associates director John Folan £195,117 for submitting at least 54 fraudulent applications for protection policies. The penalty consisted of a £70,000 fine and recovery of £125,117 the broker had been paid in commission.
Plan Money director Peter Chadborn says: “This case is a perfect example to demonstrate there is risk of consumer detriment in protection, which is often perceived as a lower-risk area of the market.”