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Crackdown brings broker bans and record fines

The FSA took a record £33.6m in fines during 2009/10 and banned more than 30 mortgage brokers under its new intensive supervision regime.

The FSA annual report, published last week, says the regulator banned 31 mortgage brokers and levied £627,000 in fines purely for mortgage fraud offences.

It says: “We normally refer mortgage brokers who benefit from the proceeds of mortgage fraud to the police, as they pose the greatest risk to the financial system. We consider each case individually and are working with law enforcement agencies so that as many dishonest brokers as possible are brought to justice. Twelve banned mortgage brokers are currently under criminal investigation by police forces around the country.”

The FSA says mortgage lenders have submitted 700 Information From Lenders’ reports about mortgage brokers over the last four years.

It adds: “We have continued to encourage more lenders to share intelligence on mortgage brokers suspected of knowing involvement in mortgage fraud.”

The FSA conducted two criminal insider dealing trials in 2009/10, with guilty verdicts and custodial sentences handed down in each.

Matthew and Neel Uberoi were found guilty of 12 counts of insider dealing and received 12 and 24-month custodial sentences.

Former Cazenove equities market-maker Malcolm Calvert was found guilty on five counts of insider dealing and received a 21-month custodial sentence.

The regulator also conducted three search and arrest operations in connection with ongoing investigations into suspected insider dealing and commenced criminal proceedings in a further four cases.

In 2009/10, the FSA published findings of market abuse against seven individuals, with total fines levied of £1.26m.

It fined five firms a total of £7.245m for failures involving transaction reporting, including Barclays, Credit Suisse, Getco Europe, Instinet Europe and Commerzbank.

The FSA says: “We will take tough action against those who engage in misconduct.” It uses money raised from fines to offset industry fees.

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