The Financial Services Authority last week handed out one of its largest fines – £150,000 – to one adviser for insurance fraud.
Andrew Jeffery of Jeffery Flanders (Consulting) was fined and banned for failing to put in place insurance policies despite collecting payment from customers.
He also forged documents and correspondences to mislead insurance firms and obstructed the FSA’s investigation by failing to report changes to his company’s contact details.
The regulator also banned four individuals from a single firm – Paul Willment, Melanie Aspden, Gaenor Clayton and Barrie Duncan Aspden, who worked at Orion Direct and Peppercom. Willment was also fined £50,000.
The source of the ban and fine at Orion Direct was the actions of Barrie Duncan Aspden who with-drew over £300,000 worth of client money to set up a company called Click the Pepper.
The actions of Aspden came to light following information that the FSA received through its whistle-blowing line.
The FSA’s small firms and contact division looked into the matter before referring it to its enforcement division for a full investigation.
The regulator says Willment rarely attended Orion’s offices, had no active involvement in managing the business and delegated his duties to Aspden, who was an un-approved employee.
While Willment was aware of the transfers of client money, he failed to challenge Aspden about it and as a result the FSA says he was able to commit insurance fraud.
Aspden’s wife Melanie and sister-in-law Gaenor Clayton have also been banned for their failure to demonstrate competence and capa-bility as directors at Orion Direct and Peppercom. They were not involved in decision-making or financial management and delegated these responsibilities to Aspden.
They also failed to ensure client funds were used solely for the purposes they were provided for. Since January the FSA has banned 14 individuals for failings relating to insurance businesses, with fines totalling over £500,000.
Margaret Cole, director of enforcement and financial crime at the FSA, says: “These individuals acted with complete disregard for the interests of their customers and the FSA’s regulatory requirements.
“Individuals holding a significant influence function role such as that of director must act with integrity as well as with the skill and dili-gence necessary to manage the businesses they are responsible for.”
She adds: “We will continue to take action against those who commit insurance fraud, as well as those who fail to prevent it.”