FSA bans Lancs broker
THE Financial Services Authority (FSA) has banned a Lancashire insurance broker from taking a senior role in the financial services industry and petitioned to wind up his firm – the first time it has used its insolvency powers.
The FSA said it had banned Graham Darby, a director of the Nelson-based broker Ambrose Darby, for failing to “adequately” control his own business.
It petitioned to wind up the firm under the Financial Services and Markets Act 2000 which permits the court to close down a business if it is considered “just and equitable” to do so.
Mr Darby fell foul of the regulator because he did not “conduct client money reconciliations as required” and did not have a full understanding of the firm’s responsibilities when it came to handling client money.
The FSA said Mr Darby was diagnosed with a severe medical condition in July 2008 but Margaret Cole, its director of enforcement, said this did not excuse the way the business handled its affairs.
She said: “The FSA is sympathetic with regard to Darby’s medical condition, but the consequence nonetheless was that it was unclear both to customers and providers who was responsible for the day-to-day operation of the firm while he was absent.
“This was unacceptable. Directors must demonstrate their capability to ensure their firm meets compliance standards and those who do not do so face being banned from senior roles in the financial services industry.
“The case is notable for the first use of our insolvency powers on ‘just and equitable’ grounds with a regulated small retail firm and in similar cases we will not hesitate to use this winding up power to protect consumers and their money.”
The FSA found there were no systems and controls in place at the firm to manage the receipt of cash from customers or to pay premiums to insurance providers. At one time the FSA said it owed insurance providers £83,814 and was owed £61,961 from customers with some of the cash outstanding for more than 90 days.
Ambrose Darby is currently in liquidation and is no longer authorised to conduct regulated business.
