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FSA bans firm director after failings cost clients £85,000

The FSA has banned the director of a mortgage and general insurance firm from holding senior positions in the financial services industry after his failure to comply with client money rules resulted in the loss of approximately £85,000 of his customers’ money.

Matthew Sixsmith was the director of Manchester-based Bridgewater House UK, which dealt mainly in the sub prime mortgage market, but also arranged life and critical illness insurance in connection with those mortgages.

When Bridgewater sold an insurance policy, it would charge its customers two years’ insurance premiums upfront and then add this amount to the mortgage.

The firm agreed with its customers that it would hold this money and then pay the insurance premiums to insurers on their behalf.

However, Sixsmith failed to separate his customers’ money from that of the firm and used only one bank account under the name of Bridgewater to administer both his business and the premium payments customers had entrusted to him.  

As a result, when Sixsmith’s firm ceased trading in September last year, approximately £85,000 of customers’ money was lost.

The FSA says as Bridgewater’s sole director, it was also Sixsmith’s responsibility to ensure that any insurance premiums that customers had lodged with the firm were passed on to the insurers when payments became due.

However, approximately 700 policies lapsed because, until May 2008, Sixsmith kept no record of when these payments should begin or end for each of the firm’s customers and therefore he failed to ensure that premiums were paid when due.

The FSA says it would have imposed a penalty of £25,000, but this would have placed Sixsmith in serious financial hardship.

FSA director of enforcement Margaret Cole says: “Sixsmith was incompetent and his actions posed serious risks to customers who trusted him with their money and expected him to pass that money on to insurers.  

“Individuals who look after client money must act in accordance with the rules. Where they fail to comply, we will not hesitate to take enforcement action against them.”


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There are 14 comments at the moment, we would love to hear your opinion too.

  1. Why should a character like this not suffer ‘financial hardship’, he showed little consideration for his clients who as a consequence will no doubt be at risk of hardship. Why do the FSA only seek to fine the big corporates rather than being even handed and clean up the industry properly

  2. Victoria Mitchell 5th February 2010 at 10:59 am

    I couldn’t agree more! How infuriating to read of this man’s absolute disregard for the financial well being of his paying clients – and then to read that the FSA didn’t want to place him in financial hardship. What a farce.

  3. I agree. The type of hardship a family would suffer if they were to lose their home as well as their bereavement over the loss of a loved one, would far outstrip the financial hardship suffered by Mr Sixsmith.

  4. What about the money this man has made in arranging 700 life and critical illness policies? At an average of £600 commission per plan that amounts to £420,000 in commission payments! Not to mention the 700 adverse mortgages arranged at a probably considerable average proc fee! Financial hardship! He must have had an extravagant lifestyle!

  5. Wholeheartedly agree with the first three anonymous posts, the guy appears to have been totally incompetent.
    BUT when has the FSA ‘banned from holding senior positions in the financial services industry’ anyone from a big bank? Many of these have lost clients vastly more than this guys £85k (all be it that if policies lapse losses could escalate).
    Again we have to ask the FSA what it is doing about the big companies and their Directors. They seem more intent on employing senior personnel from the banks at the FSA itself than getting to grips with the problems at the companies these people have been running.

  6. What i do not understand is how the insurance companies are accepting this type of business. It can only go wrong. My guess is the clawback period was 2yrs???????????

  7. When was this firm first authorised, were there any compliance visits and how on earth did the FSA not pick up the problem earlier?

    What happened when the insurance premiums were not paid?

    It would appear the competence of the FSA should be questioned, but what is new.

    Margarete Cole appears to pay more attention to publishising herself, when perhaps she should be concontracting on the foundation of her job. No doubt Compensation will be paid by members.

    The FSA has been told to wake up many time, when if ever will it happen.

  8. Why isn’t Sixsmith being pursued under the criminal law?

  9. No comment on whether or not this person was authorised to hold clients monies!
    Using some convoluted logic we have to assume that if he was not authorised the Regulator would have said so, meaning another charge on the ‘rap sheet’. As the regulator didn’t say he was NOT authorised we must assume that he was authorised and the FSA failed to regulate him properly as his 6 monthly returns should have shown the position.
    Perhaps the FSA does not have the necessary collective experience within it’s ranks to know about running SME’s so didn’t know what questions to even ask.
    Similarly it never asks the banks about their risk taking. Thats another story of course as the banks are above regulation, for many intertwined reasons but ‘jobs’ featuring very highly.

  10. Like father like son or is it the other way round.
    His father Richard was banned from being a company director after the collapse of the Mortgage Practice in Manchester where he left a trail of debt and mismanagement and brokers without being paid for months

  11. Strange how the FSA are reluctant to impose a fine on a crook becuase it might cause financial hardship, but they are oblivious of the plight of Ex Park Row advisers like myself, who have been unable to work for 3 months.

    Our crime? not leaving Park Row before they closed.

  12. Could somebody please explain how this charlatan was able to hold client money?

    Which bank provided the facility?

    Which incompetent regulator failed to identify this massive conflict of interest?

    Which insurance company provided the ability to write this class of business on a 2 year clawback indemnity basis?

    Which bank account were the direct debit payments made from? OR??? were the payments annually in advance?

    Regulator, bank and insurer were jointly and severally liable. As for the enforced hardship bit, this was theft and as such liable to a CRIMINAL prosecution. Why were the police not involved.

    The FSA should clean out the Augean Stables before foisting huge RDR costs on honest IFAs.

  13. JAVJDE oawkeggljbml, [url=]mduheoutdbjt[/url], [link=]qyuvouequpcn[/link],

  14. Mathew sixsmith is still running direct home which his girlfriend fronts buying and selling homes / renting in Burnley handling money , promotion, formation & management of a company.

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