First Class Mortgages has gone into administration, leaving more than 45 members of staff out of work.
The Barking-based intermediary’s fall from grace was sparked by the Financial Service Authority’s recent banning of its boss John Lepine, as exclusively revealed by Mortgage Strategy at the beginning of the year.
Lepine, a co-owner of the company, was exposed as having failed to disclose to the regulator that he had a previous conviction when FCM applied for approval to carry out regulated activity.
The FSA discovered Lepine had been given a three-year jail sentence in 1989 after being found guilty of conspiracy to obtain property by deception.
Lepine’s ban prompted FCM to apply to the FSA to have its authorisation to carry out regulated ac-tivity withdrawn.
Now the firm appears to have completely shut up shop leaving 45 staff on the breadline just weeks after the Bank of England upped the cost of living by 25 basis points.
Lepine has been uncontactable for comment since Mortgage Strategy first broke the FCM story.
But London-based administrator Anthony Batty & Co tells Mortgage Strategy that it began work on the liquidation of FCM on January 9 and the process could take as long as a year to complete.
FCM is thought to have been just one of around 25 mortgage brokerages that the FSA was closely monitoring, and sources say Lepine’s exposure has been highly embarrassing for the regulator, revealing flaws in how it checks applications for authorisation.
This also leaves open the question of how many more firms could be potential risks to the public.
One source reveals that the secured loans part of FCM, which makes up around 25% of its business, has already attracted interest from a buyer.