The FSA has banned an insurance broker from working in the financial services industry after the Upper Tribunal upheld the regulator’s case against him.
Derek Wright’s case was first made public last May. The publication of the decision notice against Wright was significant as, along with one other case, it marked the first time a decision notice that had been referred to the tribunal was published under powers given to the FSA in 2010.
Wright referred the case to the Upper Tribunal in March 2011, which backed the FSA’s decision to ban him a year later.
In September 2001, Wright was disciplined for misconduct by the Lloyd’s of London Disciplinary Tribunal after being found guilty of four charges relating to his previous role as director at an unnamed insurance broker.
The LDT found Wright arranged for premiums to be paid by cheque made out to him personally rather than the company he worked for. He kept more than £60,000 and arranged for the company to issue cover notes and pay the premiums to insurers.
From 1997, Wright ran Essex-based Moorgate Insurance Agencies, which was authorised by the FSA from 2004 to 2008. During this time Wright acted as a director of Moorgate, despite never having been approved by the FSA as a director.
The only person within Moorgate who was approved to act as a director was Wright’s wife Mary, who had little to do with the firm on a day-to-day basis.
Moorgate’s retail mediation activities returns to the FSA consistently showed the firm’s capital resources were below the required levels.
In February 2007, Wright informed the FSA that the firm’s capital deficit of £14,909 would be plugged by a share issue. But while a copy of a Companies House form was submitted to the FSA purporting to show an allocation of shares to Wright, the annual returns submitted by the firm to Companies House later that year showed no new shareholdings.
In 2008 the FSA asked Wright to prove that Moorgate’s creditors had been paid, and that debtors’ money had been collected. His response was that another broking firm had taken over responsibility for collection and payment of premiums, which took place without the FSA’s knowledge.
FSA head of retail enforcement Tom Spender says: “This case graphically illustrates the dishonesty and lack of integrity that some brokers will exercise if it suits their purposes.
“Wright dishonestly sought to hide his past and rehabilitate himself by posing as someone authorised to carry out regulated functions for Moorgate, when he was not. The FSA will continue to take strong action whenever we see this type of conduct.”