The regulator fined Christopher Davies, director of Newquay Investment Services (2004) Limited, £17,500 for the offence. Had Davies not settled at an early stage, the FSA would have imposed a fine of £25,000.
After Newquay had applied to the FSA last year for the adviser to be confirmed as an approved person, Davies became aware that the adviser’s previous employer had suspended him because of concerns about his business methods and ethics, including apparently inflating income figures.
Despite concluding that the adviser had lied about why he had left his previous employment, Davies reportedly failed to disclose this significantly adverse information to the FSA.
The regulator deemed that Davies failed to exercise ‘appropriate control’ over mortgage applications submitted by the adviser or to consider whether it was suitable to allow him to continue giving advice on life and other products. The FSA said Davies also failed to understand the risks associated with ‘fast track’ mortgages, and as a result, allowed the adviser to submit mortgages of this type to lenders.
Margaret Cole, director of enforcement at the FSA, said the failures exposed customers to an unacceptable risk of being recommended mortgages which may not have been suitable for them and exposed lenders to the risk of offering mortgages on the basis of false or misleading information passed through Newquay.
She warned: “The fine indicates that the FSA takes a serious view of such failings and serves as a deterrent to directors of regulated firms from acting in a similar way
