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FSA removes director’s approval to hold senior role for two years

The FSA has revoked the approval of a Durham-based director of a mortgage broker firm, preventing him from holding senior positions in the financial services industry for at least two years.

Roger Collins was the only director and approved person in his firm Thoroughgood Harrison and Davies.

Among his failings, which put 300 customers at risk of receiving unsuitable advice, Collins allowed an unqualified mortgage adviser to give unsupervised advice to customers.

A number of client files were reviewed and it was apparent that inadequate affordability assessments were undertaken by the firm’s advisers.  

One client was recommended a mortgage contract which exceeded his net income and others were recommended potentially unaffordable mortgage contracts which extended into their retirement.

Collins’ inadequate management and poor understanding of regulatory requirements led the FSA to conclude that he lacked the competence and capability to perform senior roles of significant influence at an authorised firm.
The firm has now been put in voluntary liquidation and is therefore no longer active in the market.

Collins would have been fined £30,000, but evidence was supplied which demonstrated that imposing such a fine would cause severe financial hardship and threaten Collins’ solvency.

FSA head of enforcement and financial crime Margaret Cole says: “Collins failed to manage his firm adequately and he failed to convince the FSA that he was competent and capable of performing “significant influence” functions at an authorised firm.

“Senior management who do not demonstrate the necessary skills to ensure their firms are properly run, and their customers are protected, will face tough sanctions.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. ‘severe financial hardship’ – ah bless….. what about the clients….. that are now more than likely suffering the same ‘sever financial hardship’

  2. We all know that this sort of practise has been going on for years, it’s partly to blame for the state of the market, it’s only now that these types of mortgage (self cert) often referred to as Lord Mandelson Mortgages are no longer available that our beloved FSA has stepped in to fine the culprits. Why O why can’t the FSA get involved at the start of this sort of thing to prevent it continuing.

  3. More evidence of imbalance in regulation?

    Adam Applegarth, Fred the Shred and others got away with actually harm to society as whole but the FSA concentrates all its resources on small firms who assisted someone to buy a house, the purchasers signed documents knowing the statements were not based on fact but will they also be prosecuted? Society needs balance, I see none.

    Here is an update from Mike Fenwick:

    Last year I posted that I was looking at the lack of a 15 year long stop with some ideas of how to address it.

    Evan has suggested I update what has happened since – he knows my net has widened beyond that one topic since then.

    First steps: I am having to rebuild my list of contacts – with those in the market, journalists, politicians and last week I was involved in a face to face meeting with the regulators.

    I can make no promises, other than I have started and intend to continue. Some of the ideas and thoughts I have are way “outside the box” – and for me that is very important, perhaps crucially important, because mainstream collective thinking by the high and mighty – regulation as presently found “inside the box” leaves me, and I believe many others, with far too many questions, simple questions – such as:

    If regulation as currently conceived was proving irrefutably effective:

    Why do we have a banking crisis, with its clear long term economic and social consequences?

    Why do we not see a clearly visible contraction in the activities of both the FOS and FSCS?

    Why if the question being addressed by the great and the good relates to entities being “too big to fail” are we seeing regulations being introduced by them that ensure other entities will be “too small to succeed” – creating the very questions which they failed to address and cannot now find answers?

    These are simple yet valid questions. I hope ( and believe) I can find some answers that I can firstly explain in writing, but more importantly also demonstrate in practice – viable alternatives to the status quo.

    Evan knows: I genuinely cannot place a timescale on this, cannot make any promises, but I have started and intend to continue.

    Mike …

    Well Hector, you told me the FSA wants to maintain ‘diversity’, the RDR is one example of regulation which will do the opposite.

  4. “Senior management who do not demonstrate the necessary skills to ensure their firms are properly run, and their customers are protected, will face tough sanctions.” NO FINE – Really tough sanctions!!

  5. Banned from a senior role for just 2 years? Sounds like 2 years is barely enough for someone that incompetent to re-learn their trade let alone be trusted to be in charge of others. And if you don’t get fined because it risks your personal solvency then surely that’s just encouragement to take the risk of breaking the law?

  6. What particularly uncharitable comments. This broker has lost his source of income, even though there only appears to be finding of potential, rather than acutual loss, to his clients.

    The practice of unaffordable loans and mortgage contracts extending past retirement date was all too common in most of the large lenders not that long ago. Perhaps if the FSA had the gumption to ban directors from the large lenders a few years back then the message would have made it’s way down to the smaller fish in the market.

    Just another example of the FSA picking on the ‘little man’ to justify their existance, whilst their friends in the big banks are free to do what they wish.

  7. You’ve hit the nail right on the head. What investigations took place at the receiving end of this mortgage application, lenders appear to be completley blameless in the cycle of unsuitable mortgage contracts.

  8. I was interviewed for a position in this firm many years ago, by Roger Collins, and the industry test was an absolute joke. Six questions that only demonstrated how to punch numbers on a calculator.
    He admitted I was more qualified and had more industry experience.
    Luckily I turned down the job offer!

  9. I do not usually add to these comments as they tend to be uninformed and stuck in a two-dimensional limbo where spelling and logic are gifts rather than attributes. However, just this once…
    While the FSA bans offenders and recognises that there are insufficient funds to fine them, we can see that there is still some sense of proportion. No further comment is required so ignore the fact that they were not fined as well. As the younger element might say “Get over it.”
    Since everyone else is apparently entilted to be trivial why does Margaret Cole insist on vilifying/demonising her department’s victims everyone by addressing them by their surname alone. They have not been convicted of something criminal nor has she been personally offended. She should have the common politeness to address them properly rather than sounding like a Queen of Hearts.

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