Newton used customers’ money to buy debt management firm, First Step Finance Limited, according to the regulator.
He bought the firm from Christine Whitehurst and directed or allowed £322,500 to be transferred from accounts to her when he was director between October 2013 and May 2014, the FCA found.
The regulator said Newton knew monies from First Step should only have been used to pay customers’ creditors or to be returned to customers.
Yet Whitehurst was paid, and at a time when First Step had a significant client money shortfall in its accounts.
First Step was a debt management firm offering a debt reduction service, holding customer money before making full and final settlement offers to their creditors.
The firm went into administration on 28 May 2014 with a client money shortfall of around £7.1m from more than 4,000 customers.
Whitehurst was banned in October 2017 for dishonestly pocketing money from First Step.
Newton acted with a serious lack of honesty and integrity, the FCA said, and as a result, decided that he is not a fit and proper person.
He is disputing the regulator’s decision and has referred the matter to the Upper Tribunal at which the FCA and Mr Newton will be able to present their cases.
Therefore, the FCA decision notice has no effect until the determination by the tribunal.
