The Financial Services Authority (FSA) has banned a partner at a self invested personal pension (SIPP) operator at the center of fraud proceedings for failing to keep informed about management decisions at the firm.
The FSA has publicly censured Michele King, a partner at HD Administrators LLP (HDA), withdrawn her permission, and banned her from holding any controlled function.
The FSA removed the permissions of HDA in March after two of its directors were arrested over fraud allegations.
An investigation was brought about after investors claimed the firm had defrauded them of £20m through the promotion of unregulated collective investment schemes (UCIS) through a SIPP
The FSA said King would have also been fined £20,000 were it not for evidence that the penalty would have caused her serious financial hardship.
King became a partner at SIPP operator HDA in August 2008. She had previously been employed as an accounts administrator and, before becoming a partner at HDA, she had performed some minor administrative tasks at the firm.
The FSA's investigation revealed that despite taking on a significant influence function at HDA, King took no steps to understand or fulfil her regulatory responsibilities.
She also failed to discharge her responsibilities as an approved person through her lack of understanding the nature of HDA's business and its regulatory responsibilities.
She did not keep herself involved in, or informed about, the management decisions at the firm.
The FSA's case against King is part of a wider investigation into the events at HDA, that led to its winding up in June 2012.
HDA is now in the hands of the Official Receiver in Manchester.
The Serious Fraud Office and Nottinghamshire Police are currently investigating allegations of criminal activity at an unregulated company connected to HDA.
Bill Sillett, the FSA's head of retail enforcement, said:"While we have not imposed a fine because it would place her into serious financial hardship, Michele King should be under no illusion about the seriousness of her wrongdoing.
"What we have found shows that King was totally out of her depth in her role as partner at HDA and failed to take her responsibilities seriously.
"Further, her lack of involvement in the decision making at HDA meant she was a bystander while events at the operator got out of hand.
"All approved persons, but especially those holding a significant influence function, must understand and fulfil their role and meet their regulatory obligations. If they do not, their customers and the wider market are put at risk."
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