The FSA has taken action against an individual and a mortgage broker for failings including not being open and co-operative in their dealings with the regulator.
David Roberts, sole director of A-Z Mortgages Limited, has been fined £14,000 and Hygeia Mortgages and Finance Limited has had its permission to undertake regulated activities cancelled.
Roberts has been fined £14,000 for failing to put in place adequate systems and controls at A-Z, and failing to be fully open with the FSA about business practices at A-Z and the action he was taking to correct systems and controls failings.
The FSA’s Small Firms and Contact Division identified a series of systems and controls failures, which occurred between 28 November 2006 and 31 August 2009. These included: failing to put adequate systems and controls in place to identify mortgage applications containing false or misleading information, failing to make sure that A-Z kept adequate records to explain changes in customers’ circumstances and to show that the advice and product recommendations made by A-Z were suitable, and a failure to adequately monitor the activities of an adviser putting business through A-Z.
Roberts told the FSA that he would correct failings that were identified by the FSA in 2006, but many of the same failings were identified again in 2009. He also failed to be fully open with the FSA during a treating customers fairly assessment in 2008. During that assessment, the business practices that Roberts described to the FSA were, in some cases, those that he aspired to achieve, but did not fully reflect what happened in practice.
The FSA considers that Roberts’ misconduct is particularly serious as it meant that customers were at risk of receiving unsuitable advice and, for a period of time, A-Z was at risk of being used for financial crime.
Roberts agreed to settle at an early stage of the FSA’s investigation and qualified for a 30% discount under the FSA’s settlement discount scheme. The financial penalty of £14,000 reflects this discount, the FSA said. Without the discount, the financial penalty would otherwise have been £20,000.
The FSA has cancelled Hygeia Mortgages and Finance Limited’s permission to undertake regulated activities for failing to satisfy threshold conditions. The FSA found that Hygeia had inadequate capital resources in relation to the regulated activities it had permission to carry on.
In addition, Hygeia failed to co-operate by repeatedly refusing to allow the FSA to carry out a supervisory visit. Hygeia also failed to provide information to the FSA, despite repeated requests that it do so. The FSA concluded that Hygeia had failed to ensure that its affairs are conducted soundly and prudently, and in compliance with proper standards.
Tom Spender, the FSA’s head of retail enforcement said: “Authorised firms are obliged to deal with the FSA in an open and co-operative way. David Roberts failed to ensure that the correct systems and controls were in place
