The FSA says that as a result of compliance director Simon Robins’ failure to supervise the firm properly, third parties obtained mortgage applications on a fraudulent basis.
The Portsmouth-based packager, set-up by Terry Pritchard, went into administration in April 2008, but Pritchard left the firm in 2006 to join Edeus, although he remained a shareholder.
The watchdog says under Robins’ guidance, the firm failed to record and were unable to demonstrate the reasons for the particular recommendations it made to its customers.
In two instances where the files did contain suitability letters, it post dated the mortgage offer. Also, none of the files contained any evidence of product research having been carried out.
Robins told the FSA that Chase UK reviewed 20 per cent of all business written by the advisers. However, it found no records of file reviews were kept and no issues of concern were ever recorded.
The FSA was also concerned that there were no systems and controls in place to monitor the quality of business introduced by third parties, on which the packaging firm relied. In particular, the FSA has revealed that Chase allowed one adviser to work with the firm, and to submit business to them, even though Chase UK knew the adviser had been previously removed from a lender’s panel was due to the poor quality of introduced business.
FSA head of retail enforcement Jonathan Phelan says: “It is vital that directors demonstrate the necessary competence and capability to ensure their firm provides suitable advice and meets compliance standards.
“Those who do not demonstrate these qualities face being banned from senior roles in the financial services industry.”