The FSA has stepped back from its threat to ban former Equitable Life chief executive and appointed actuary Chris Headdon for life and has banned him for six years.
Headdon is now excluded from holding senior roles in financial services companies until May 2010.
The move has been condemned by Equitable Members' Action Group chairman Paul Braithwaite who says Headdon should have been banned for life.
Braithwaite says: “One million policyholders' retirement shave been damaged by Headdon. He should be banned from ever working in the industry again. The FSA is making policy on the hoof by letting him off with a six-year ban.”
Headdon, who is 47, has not objected to the ban and has waived his right to a tribunal hearing after the FSA withdrew its initial proposal for a lifetime ban.
The ban stems from a failure to disclose to the FSA a side-letter to an agreement with the Irish European Reinsurance Company that raised questions about the true value of the deal.
The side-letter allowed for the cancellation of an £800m reinsurance deal with Ireco, which the FSA said would have significantly weakened Equitable's balance sheet.
In April, the regulator said that it would not be pursuing former Equitable director Roy Ranson because of his age. Ranson is 73 and the FSA is understood to have con- sidered that action against him would be pointless because its only sanction is disquali-fication from directorships.
The FSA is only permitted to issue penalties which relate to actions of senior managers since it took its powers in 2001.
FSA director of enforcement Andrew Procter says: “Mr Headdon should have provided information to the FSA about the side-letter to the reinsurance contract and, as a result of his failure to do so, the FSA has decided he is not fit and proper. The FSA sets high standards by which we judge senior management.
“This includes the requirement that individuals deal with the FSA in an open and co-operative way. Where beh-aviour falls below our standards we will take action to protect customers.”