The FCA is attempting to ban the boss of a debt management firm for allegedly using client money to purchase the business.
Darren Lee Newton purchased First Step from former director Christine Whitehurst in 2013. The FCA argues he funded the deal through client money rather than out of his own pocket.
Newton allowed more than £322,000 to be transferred to Whitehurst from First Step’s accounts, the FCA claims, despite a shortfall in client money at the firm of more than £6m at the time.
According to the FCA, clients were supposed to be transferred to a new firm, Debt Help and Advice, once First Step was purchased but this did not happen.
First Step entered administration in 2014, with more than 4,000 customers being affected by a £7m shortfall in client money.
The FCA banned Whitehurst and her husband, Adrian, in October 2017 for dishonestly misappropriating money from First Step, but Newton is appealing his ban and will take the case to the Upper Tribunal.