Shield’s director, Delwyn Way, has been fined £77,957 and banned from working in financial services for putting clients at risk by failing to ensure their insurance premiums were passed onto insurers. The fine covers the estimated amount of client money and assets that Way embezzled from Shield’s client money account to fund business and personal expenses.
Meanwhile, Griffiths McAlister director, Adrian Shillaker, was not fined but has also been banned from holding a job in financial services again for transferring client money to Griffith McAlister’s business account to fund its business expenses.
Shillaker also failed to ensure the client money was managed in accordance with the FSA’s Client Money rules including failing to segregate client money from other funds. Shillaker’s failings left customers at risk of losing their money. The FSA has also cancelled the permission of the firm.
A financial penalty has not been imposed on Shillaker as he provided evidence this would cause him serious financial hardship. Shillaker has taken steps to ensure that monies owed to customers have been repaid.
Both cases demonstrate a lack of integrity and honesty, said the FSA.
Margaret Cole, FSA director of enforcement and financial crime, said: “It is essential that customers have confidence their money and assets are safe and that firms holding their money have strong management oversight and control over their business. It is simply unacceptable that these two individuals have failed to ensure their clients have the appropriate protection in place and as a result we have taken firm action.
“Firms must take their responsibilities to protect client’s money and assets very seriously and we have clearly set out our expectations in this area.”
The FSA has just established a new unit to enhance and strengthen the FSA’s existing capabilities in the area of client money and assets. The unit consists of teams responsible for specialist supervision, policy, data analysis and risk management.
The FSA has recently fined JPMorgan, Rowan Dartington and Close Investments Ltd for client money breaches.
