The Financial Services Authority has imposed a lifetime ban on David Marriott for his persistent misuse of client money.
The FSA says that Marriott, who was the former chief executive of two insurance companies, failed to segregate and protect money from clients’ insurance premiums.
Both Target Underwriting Ltd and Professional Insurance Select Ltd were run by Marriott, who used client money to support day to day finances at both firms. Marriott used client money to give himself and his staff bonuses and to purchase a £27,000 car for a fellow director and a £35,000 car for himself. This was made against a backdrop of worsening trade positions and business being lost by Target. It resulted in a client money defecit of £570,841.
Under the FSA’s client money rules, firms are required to keep client money ringfenced from the firm’s money in segregated accounts with trust status. This helps to protect client money in the event of the firm’s insolvency.
Marriott also provided false and misleading information to the FSA in his applications for authorisation in order to cover up his misuse of clients’ money. He stated that client money was safe and that a client money audit had been conducted at the firms, when he knew both statements were false.
Simon Gowler, who was one of the directors at the firm, was fined £5,000 for failing to oversee the firm’s finances and private money controls. The fact that he took immediate action when learning of the firm’s trading position saw the FSA reduce the fine from £15,000.
The FSA says Marriott was not fined by the FSA due to his own financial position.
FSA director of enforcement and financial crime says: “Marriott acted with complete disregard for his clients by using their money for his own benefit when he knew his firms were failing. He flouted regulatory requirements and deliberately misled the FSA about his activities.
“The FSA has repeatedly emphasised the importance of ensuring that client money is adequately protected and recent action in this area shows how our focus has intensified. We want firms of all sizes to realise that they must ensure client money is segregated in accordance with FSA rules.”