The FSA has banned three insurance company directors for misusing client money and failing to keep it notified on a client account deficit.
Stuart Lawton, Paul Adams and Robert James, directors of London-based BPS Insurance before it went bust, have all been banned from certain regulated financial services functions, including senior management.
Just months before the firm went into administration, the FSA discovered the trio had continually failed to inform it of a £3m deficit in its client account.
In addition, they had used clients’ money to pay for general company expenses in early 2005.
The regulator found no clients were adversely affected, but they were at risk of not receiving the insurance cover they had paid for.
Jonathan Phelan, head of retail enforcement at the FSA, says: “The directors of BPS acted recklessly and without integrity. They failed to ensure that clients’ money was adequately protected and undermined consumers’ confidence in the insurance sector.
“Senior managers must recognise their responsibilities – they are personally responsible and the FSA will take action against directors who fail to act appropriately when carrying out their regulatory functions.”
The FSA considers the three are not fit and proper to carry out functions in financial services due to a lack of honesty and integrity, and has banned them.
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