The FSA has banned a director of a debt-ridden insurance broker for failing to notice a co-director had been using client funds to keep the company trading.
Stephen Allen, director of Fabien Risk Services, can no longer hold any management position in the UK financial services industry or any role requiring FSA approval.
A previous FSA investigation led to the banning in 2007 of Allen's co-director Shane Garvey and Fabien office manager Lee Goddard.
In late 2005 Fabien fell into creditors' voluntary liquidation after the firm suffered £700,000 in losses, of which £470,000 was owed to insurers, brokers and underwriters.
An FSA investigation found Garvey authorised the withdrawal of client funds, aided by Goddard, to use the money to keep Fabien trading without Allen's knowledge.
The FSA found Garvey and Goddard lacked integrity.
Allen accepted his poor knowledge of Fabien's accounts was a neglect of his business leading to a failure in his duty as a director. He was found by the FSA to lack the competence to run a regulated firm, though not honesty or integrity.
Margaret Cole, director of enforcement and financial crime at the FSA, says: "As a director there is an expectation that you are competent enough to look after client money; Allen did not fulfil this role as he failed to exercise closer scrutiny over Fabien's accounting processes.
"We have clear rules about how a regulated firm should be run; Allen, Goddard, and Garvey failed to adhere to these rules and therefore showed themselves to be neither fit nor proper.
Because of this, and the inherent risk they pose to consumers, we have taken tough action against all three: Garvey has been banned from working in the regulated financial services industry, Goddard from holding significant influence roles and Allen from any management role in the UK financial services industry and any role requiring FSA approval."
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