The FSA has banned the director of an insurance brokerage.

Stephen Allen of Fabien Risk Services Ltd was banned for failing in his duties as a director of a regulated firm. This means he is prohibited from holding any management role in the UK financial services industry and any role that requires FSA approval.

The regulator’s move follows its investigation which also resulted in the banning in 2007 of Allen’s co-director Shane Garvey and Fabien office manager Lee Goddard.

In late 2005 when Fabien was placed in creditors’ voluntary liquidation, the firm had suffered £700,000 in losses, of which £470,000 was owed to insurers, brokers and underwriters.

An FSA investigation revealed that Garvey authorised the withdrawal of client funds and Goddard complied with instructions to use the money to keep Fabien trading without Allen’s knowledge. The FSA therefore found that Garvey and Goddard lacked integrity.

Allen accepted that his lack of knowledge of Fabien’s bank accounts was a neglect of his duties and that he had failed in his duty as a director. As a result, it was concluded that, although Allen did not lack honesty or integrity, he lacked the competence to run a regulated firm.

Both Allen and Garvey held the Controlled Function 1 (director) position at Fabien Goddard was not an approved person and his chief role was as accounts manager.

Margaret Cole , director of enforcement and financial crime at the FSA, said: “As a director there is an expectation that you are competent enough to look after client money Allen did not fulfil this role as he failed to exercise closer scrutiny over Fabien’s accounting processes.