View more on these topics

FSA censures directors of sub-prime mortgage firm

Michael Worthington and Darren Millington have been censured by the Financial Services Authority for failing to make sure that their business, Lifestyle Finance had the appropriate compliance and sales procedures in place to ensure customers were given suitable mortgage advice.

Lifestyle was a mortgage broker specialising in the sub-prime market and went into administration in May 2007.

Worthington and Millington were the executive directors and main shareholders in Lifestyle. Their conduct was considered serious because they failed to ensure the firm put in place appropriate written sales and compliance procedures and operate in accordance with them,

It also did not complete a past business review within a reasonable timescale and therefore could not identify customers who might have been mis-sold mortgages and were entitled to redress.

It also failed to ensure that their compliance department had sufficient experienced and qualified staff; and did not properly control spending on staff salaries and diverted much needed funds away from the compliance department and the past business review.

Margaret Cole, director of enforcement at the FSA, says: “It is the responsibility of a firm’s senior management to ensure that their business is meeting regulatory requirements. It is important that senior managers take the conduct of past business reviews seriously and this includes applying appropriate resources to them. Our action against Mr Worthington and Mr Millington should be a warning to others that approved persons will always be held to account whatever the status of their business.”

Worthington and Millington have agreed not to hold any job with significant management influence in the future.

In deciding the appropriate action to take, the FSA took into account the fact that both individuals had been made bankrupt otherwise it would have fined Worthington and Millington £150,000 each.


Recommended

King in talks at Number 10

This morning Mervyn King, governor of the Bank of England, met with Prime Minister Gordon Brown and chancellor Alistair Darling following the failure of the $700bn American rescue package.

Newsletter

News and expert analysis straight to your inbox

Sign up