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FSA says Network Data owed ARs more than £2m

The FSA has revealed that Network Data owed its appointed representatives more than £2m in unpaid commission, as of April 6.

The regulator released its final notice regarding the insolvent network today, detailing reasons as to why it finally decided to revoke the network’s permissions.

It found from evidence provided by Network Data that the group owed ARs £2,075,000, of which £967,245 was more than three months overdue, as of April 6. The FSA says Network Data continues to dispute this amount.

In the FSA’s Second Supervisory Notice, it says Network Data provided written evidence claiming the initial figures it had given to the FSA were wrong and it was in fact still solvent. The group said that it owed ARs £1,343,162, of which £561,093 was more than three months overdue.

Consequently, Network Data said that the FSA’s actions were invalid. It also argued that the FSA’s decision had hindered its attempts to sell the business. Network Data asked the regulator to revoke any statutory notices so it could complete a buyout deal.

But the FSA says Network Data’s story soon changed. The SSN says: “Written representations were substantially different from its oral representations; the oral representations accepted the FSA’s statements on Network Data’s solvency. Network Data accepts it is trading insolvently.” As a result, the FSA revoked its permission on April 17.

The FSA says: “Network Data has had a considerable period of time to resolve these issues but it has failed to do so.”

Administration proceedings began this week led by administrator Baker Tilly.

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  1. Julian Stevens 3rd June 2009 at 10:56 am

    FSA says Network Data owed ARs more than £2m
    But what did the FSA do to try to ensure that its AR’s got paid the monies that Network Data were holding onto?
    At what juncture did the FSA realise that Network Data was experiencing cashflow problems and was not passing on monies it was contractually and thus legally obliged to pay on to its AR’s? Did not Network Data’s last set of financial returns to the regulator reveal anything that ought reasonably to have rung a few alarm bells and prompted some sort of intervention? Has the regulator acted promptly and properly at every stage of this sorry saga that has resulted in a significant number of otherwise reasonably healthy mortgage brokerages going to the wall? Is the FSA prepared to answer any of these questions or will it, as usual, hide behind the now tattered figleaf of not commenting on individual cases?

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