Lifetime ban for insurance broker
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The Financial Services Authority has imposed a lifetime ban on a former chief executive of insurance brokerages, Target Underwriting and Professional Insurance Select.
David Marriot ran Target and PISL as one business and used clients’ money to support the day to day finances at both failing firms.
He also used client money to give himself and his staff bonuses and salary increases and to purchase a £27,500 car for a fellow director and a £35,000 car for himself.
These payments were made against a background of worsening trading positions and business being lost by Target, leading to a client money deficit of £570,841 in the firms.
Under the FSA’s client money rules, firms are required to keep client money separate from the firm’s money in segregated accounts with trust status to protect clients in the event of the firm’s insolvency.
Marriott also provided false and misleading information to the FSA in his applications for authorisation in order to cover up his misuse of clients’ money.
He stated that client money was safe and that an audit had been conducted at the firms, when he knew both statements were false.
Margaret Cole, director of enforcement and financial crime at the FSA, says: “Marriott acted with complete disregard for his clients by using their money for his own benefit when he knew his firms were failing. He flouted regulatory requirements and deliberately misled the FSA about his activities.
“The FSA has repeatedly emphasised the importance of ensuring that client money is adequately protected and recent action in this area shows how our focus has intensified. We want firms of all sizes to realise that they must ensure client money is segregated in accordance with FSA rules.”
Simon Gowler, who was also a director of the firms, was fined £5,000 in July 2008 for failing to oversee the firms’ finances and client money controls.
But once he became aware of the firms’ trading position he took immediate action so the FSA believed his failings to warrant a penalty of £15,000, which was reduced to £5,000 to take into account hardship issues and an early settlement reduction of 30%.
Marriott was not fined by the FSA due to his financial position.
