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FSA bans father and son directors

The FSA has banned two directors of insurance broker FHI Limited for failing to ensure that their firm complied with FSA client money rules.

Roger Muse and his son Daniel Muse have been prohibited from performing any significant influence functions at firms carrying out regulated financial activities for three years.

This order will prevent them from running or managing a regulated business whether as sole traders, employees or appointed representatives of another firm.

The FSA found that the directors failed to ensure proper records were kept relating to the firm’s transactions and commitments in respect of client money.

The firm did not deal with any shortfall or surplus in client money and did not provide written notice to its bank that monies in its client bank account were held by the firm as trustee.

FSA director of enforcement Margaret Cole says: “This three year ban should send out a clear message that prohibitions will be used to protect consumers where senior management fail to demonstrate that they are able and willing to comply with their regulatory obligations. Both of these directors failed to discharge their duties as approved persons to ensure that their firm complied with the FSA’s client money rules.

“Although no clients were directly affected, the systems and controls for handling client money at this firm were wholly inadequate. The FSA’s rules – relating to proper segregation and accounting for client money held by firms – are a vital protection for consumers. The FSA will not wait for client money to be lost before taking action, and senior management will be held personally responsible for ensuring that their firms comply.”

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