The director of a mortgage and insurance broker who lost £85,000 of customers' money has been banned by the FSA.
Matthew Sixsmith, director of Bridgewater House UK, failed to separate money held on behalf of clients from his firm's operating capital.
Bridgewater was a sub-prime mortgage broker, arranging life and critical illness cover in connection with the mortgages it sold.
The firm would routinely charge customers for two years' insurance premiums upfront when selling policies, and agreed to add this amount to hold the money to pay the insurance premiums on behalf of customers.
However, Sixsmith kept client money within a single bank account belonging to Bridgewater, and when the firm ceased trading in September 2009, clients lost approximately £85,000.
Sixsmith also failed to ensure all the policies were paid. He kept no record of when premium payments should begin or end, and about 700 policies lapsed as a result.
As a result of these serious breaches, the FSA has banned Sixsmith from holding any senior role within the financial services industry. The regulator says it would also have fined Sixsmith £25,000, but doing so would put him in severe financial hardship.
Margaret Cole, director of enforcement at the FSA, says: "Sixsmith was incompetent and his actions posed serious risks to customers who trusted him with their money and expected him to pass that money on to insurers.
"Individuals who look after client money must act in accordance with the rules. Where they fail to comply, we will not hesitate to take enforcement action against them."
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