The regulator said Steven Moorley failed to manage and control an expanding network of mortgage brokers to acceptable standards.

As a result of these failings, some of the network’s appointed representatives (ARs) took advantage of weak systems and controls by submitting fraudulent mortgage applications and recommending unsuitable mortgage contracts.

Moorley also failed to ensure that the network handled complaints in compliance with regulatory requirements or submitted complete and accurate information to the FSA in its regulatory returns.

The director also failed to take appropriate action when some of the network’s ARs were removed from lenders’ panels.

Margaret Cole, director of enforcement at the FSA, stressed that senior management of authorised networks remained responsible for the quality and integrity of financial advice conducted in their names.

Sponsored

Episode 6: What’s next for the industry? : Powered by Partnership podcast from Newcastle for Intermediaries

Sponsored by Newcastle for Intermediaries

“This case highlights the risks posed by limited control and oversight of ARs. Moorley’s conduct was particularly serious because it exposed customers to the risk of receiving unsuitable advice and allowed the network to be used by some of its Appointed Representatives to submit fraudulent mortgage applications.”

The FSA took into account that Moorley had been open and cooperative with the regulator’s investigation, that he accepted there were management and control failures, and that the network ceased conducting new business to mitigate any risk to customers.

The regulator would also have imposed a financial penalty of £30,000 on Moorley but for evidence that imposing such a financial penalty would have caused him financial difficulty and threatened his solvency.