The regulator has also fined junior partner Simon Poole, who ran the partnership’s office in Chester, £7,000 for exposing 750 clients to the risk of purchasing unsuitable mortgages.

The FSA deemed that Mr Jones, senior partner of Jones & Poole Independent Mortgage Specialists, failed to control his business effectively or to make sure that it met regulatory requirements and did not treat customers fairly when recommending mortgage contracts.

Jonathan Phelan, head of retail enforcement at the FSA, said Jones’s fraudulent mortgage application and his dishonesty in attempting to cover up regulatory failings were completely unacceptable warranting a ban and a large financial penalty. He explained: “Mr Poole’s failings were of a lesser order and although they were deserving of a fine he has not been banned.

“It was in effect a dysfunctional partnership. It is important that partnerships which carry on regulated financial services business are organised so they can be controlled as a single business with clear lines of responsibility and accountability.”

Poole agreed to settle at an early stage of the FSA’s investigation and therefore qualified for a 30% discount under the FSA’s executive settlement procedure. The regulator said that were it not for this reduction, it would have imposed a financial penalty of £10,000.