The FSA has fined former finance director at Royal Liver Assurance Limited (RLA), George McGregor, £109,000 for entering into contracts on behalf of RLA without authorisation and which benefitted a former RLA employee.
The regulator determined that McGregor’s behaviour merited a fine of £1 million but reduced the amount because this level of fine would cause serious financial hardship. The FSA said that McGregor co-operated fully and agreed to settle at an early stage and in doing so qualified for a 30% discount on the financial penalty.
McGregor is also prohibited from performing any function in relation to any regulated activity in the financial services industry.
Between May 2009 and November 2009 McGregor entered into contracts on behalf of RLA with two companies which were controlled by a former employee of RLA. McGregor was negotiating the former employee’s bonus but thought that the amount he had agreed with the individual would not be approved by RLA’s Board. McGregor therefore sought to conceal the level of bonus by entering into the two contracts to pay substantial sums to the former employee’s companies.
McGregor abused his position in RLA. He withheld this information from RLA and circumvented systems and controls for approving contracts which he himself had been instrumental in implementing.
McGregor also falsified the signature of RLA’s CEO in order to process monies relating to these contracts. This resulted in RLA paying at least £3.6 million to the two companies and incurring a possible contractual liability of up to £18 million.
Tracey McDermott, acting director of enforcement and financial crime, said: “McGregor abused his position of responsibility and engaged in a dishonest