The FSA has fined Blake Independent Financial Services £31,500 for failing to maintain adequate capital and provid- ing misleading financial information.
The regulator found that the adviser failed to put in place subordinate loans before it became authorised in October 2003. It also failed to put in place a further subordinated loan in 2005 required by the FSA to rectify a capital resources shortfall. The South Yorkshire firm then submitted FSA regulatory returns which indicated it had the required loans in place and provided the FSA with misleading loan agreements which did not match those countersigned and held on file by the regulator.
Head of retail enforcement Jonathan Phelan says: “These were serious failings on the part of the firm, resulting in it being authorised on the basis of sub- ordinated loans that did not exist and being in breach of its capital resources requirement for more than three years. And when requested to provide copies of loan agreements, BIFS submitted misleading documents.
“The fine sends out a clear warning to the industry that the way in which firms conduct their business and the way they interact with the FSA are as important as ensuring that individual rules are not breached.”
BIFS has since rectified its capital resources deficit and as such now meets the capital resources requirement. It has also employed a compliance consultancy and a new accountancy firm to oversee the completion of future regulatory returns.