The FSA has prohibited financial adviser Michael Harding from holding any position as an Approved Person after the FSA discovered he had misled the regulator about completing his firm's Pensions Review and had in fact contacted no clients at all.
According to a statement issued yesterday by the Financial Services Authority, Harding - who was formerly a senior partner at Michael Harding Partnership in Beckenham, Kent - submitted 32 pension review returns to the FSA on behalf of his firm between March 1996 and June 2003, but in reality made most of the figures up.
When the FSA noted “anomalies” in the figures, it visited the firm in September 2003 and Harding then admitted he had "completed all Pension Review Quarterly Returns, after the first one he submitted, with false information", as Harding had not mailed any of the firm’s investors and had not even begun the Pensions Review.
Harding’s partner in the firm was also not aware of the lack of progress in relation to the Pensions Review, says the FSA, as he had managed to keep such information hidden, and he subsequently provided the same false information to his professional indemnity insurers, making it “highly unlikely” the PII provider would be able to meet any claim sought by the firm under the Pensions Review.
In speaking to the FSA, Harding is said to have declared he originally intended to carry out the review and had identified the customers of the firm whose cases should be included in the work, but never did so and could not explain it except to say he didn’t carry out the work as a result of work pressure and because he is a poor administrator.
The FSA says it considers Harding's conduct particularly serious as it demonstrated ”a lack of honesty and integrity coupled with a disregard for compliance and regulatory standards”.
As a result of the FSA’s discovery, the regulator says Harding is now restricted to conducting mortgage and general insurance advice and only under the direct supervision of his employer.
David Mayhew, the FSA’s acting director of enforcement, says given his senior position in the firm, Harding had a duty to make sure regulatory procedures were being properly followed.
"Michael Harding deliberately misled his colleagues, customers and set out to mislead the FSA, and paid no heed to our regulatory and compliance standards. The senior partner in the firm has a particular responsibility to ensure adherence to the FSA's rules and principles, making this a very serious case,” says Mayhew.
"Compliance with the Pensions Review was a matter of the highest importance for the firms concerned. The pensions review involved the security in old age of a substantial section of the public. At stake was the reputation and credibility of the financial services industry and, of even greater concern, the reduction in the pension entitlements of perhaps thousands of investors."
Harding is allowed to continue to conduct mortgage and general insurance advice with direct supervision as there is no concept of an Approved Person under FSA mortgage and general insurance regulations and therefore no rule to stop advisers from giving advice.
Instead, the emphasis is placed on the mortgage and general insurance firm holding FSA authorisation to ensure any such individual is fit and proper to conduct business.IFAonline
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