FSA bans BPS Insure directors

by Gill Montia

Story link: FSA bans BPS Insure directors

The Financial Services Authority (FSA) has banned three directors of BPS Insure Limited, for failing to inform the FSA that the London-based firm had a deficit of approximately £3 million in its client account.

The guilty parties had also increased the deficit by using client money between January and February 2005 to pay general business expenses.

The firm was placed into administration in May 2005 and its business and staff transferred to Towergate Underwriting Group.

While no clients were directly affected by the misdemeanours, there was a risk that the firm’s clients could have been left without the cover they had paid for.

The FSA’s head of retail enforcement, Jonathan Phelan, described the directors’ actions as reckless and without integrity, adding that the case would undermine consumer confidence in the insurance sector.

Robert James, Stuart Lawton and Paul Adams have all been banned from certain regulated financial services functions, including senior management.

The FSA rarely puts individual bans in place but its recent crack down on mortgage fraud has led to a rise in such actions.