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FCA ‘misled’ over cap ad as mortgage broker appeals


A mortgage broker has referred an FCA decision to cancel his permissions to the Upper Tribunal as the regulator claims it was misled over the firm’s capital adequacy.

The FCA cancelled Michael Wilkinson’s permissions to carry out regulated activities in May for providing inaccurate information about his capital resources. The regulator also found he did not meet his capital adequacy requirements for the business.

Wilkinson was a sole trader at Huddersfield-based Michael Wilkinson Mortgages.

According to the recently published decision notice,the FCA started contacting Wilkinson in April 2015 about his capital position and concerns he was reporting inaccurate information in his regulatory returns.

Wilkinson, who was also a general insurance broker, had to meet a requirement for his business to either have capital of £5,000 or 2.5 per cent of annual income, whichever was higher.

However, the regulator found discrepancies between the financial information reported by Wilkinson in his annual accounts and regulatory returns.

According to the decision notice, the difference between the capital resources level reported in the annual accounts and the FCA’s retail mediation activities returns was £14,315 in 2012, £11,854 in 2013, and £8,482 in 2014.

The financial information supplied by Wilkinson showed his net liabilities for those three years were also below the required capital level.

The notice says: “The financial information reported by Mr Wilkinson in his RMARs since at least 1 September 2012 is…misleading in that it stated to the authority that Mr Wilkinson was meeting the capital resources requirement at the relevant dates whereas, based on the financial information reported by Mr Wilkinson in his annual accounts, he had not maintained adequate capital resources to meet the capital resources requirement.”

The decision notice also says the financial information reported by Wilkinson in his annual accounts show he had capital resources “significantly” below what was required between September 2012 and September 2014.

The notice says Wilkinson did not respond to a warning in April from the FCA saying it was going to take action.

The Upper Tribunal can dismiss Wilkinson’s referral or send it back to the FCA with further directions.


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