FSA bans &quotincompetent&quot broker

Published on

The FSA has banned the director of a Manchester based mortgage and general insurance firm from holding senior positions in the financial services industry after his failure to comply with client money rules resulted in the loss of approximately £85,000 of his customers’ money.

Matthew Sixsmith was the director of Bridgewater House UK, which dealt mainly in the sub prime mortgage market, but also arranged life and critical illness insurance in connection with those mortgages.

When Bridgewater sold an insurance policy, it would charge its customers two years’ insurance premiums upfront, and then add this amount to the mortgage. The firm agreed with its customers that it would hold this money and then pay the insurance premiums to insurers on their behalf.

However, Sixsmith failed to separate his customers’ money from that of the firm, and used only one bank account under the name of Bridgewater to administer both his business and the premium payments customers had entrusted to him. As a result, when Sixsmith’s firm ceased trading in September last year, approximately £85,000 of customers’ money was lost.

As Bridgewater’s sole director, it was also Sixsmith’s responsibility to ensure that any insurance premiums that customers had lodged with the firm were passed on to the insurers when payments became due. However, approximately 700 policies lapsed because, until May 2008, Sixsmith kept no record of when these payments should begin or end for each of the firm’s customers and therefore he failed to ensure that premiums were paid when due.

Sixsmith failed to take reasonable steps to ensure his business complied with the FSA’s regulations, and therefore breached Statement of Principle 7. He also failed to ensure that adequate systems and controls were in place to safeguard the firm’s client money.

The FSA would have imposed a penalty of £25,000, but this would have placed Sixsmith in serious financial hardship. Sixsmith will not be able to hold senior positions in the financial services industry.

Margaret Cole, director, enforcement said: “Sixsmith was incompetent and his actions posed serious risks to customers who trusted him with their money and expected him to pass that money on to insurers.

Latest POLL

COMMENT ON MORTGAGE SOUP

We want to hear from you!
Leave a comment and get the conversation started.
You need to register to post, so please login or sign up below.

Latest articles

Square 1 Media announces May Mortgage Market Debate

Square 1 Media is to hold its next Mortgage Market Debate on Wednesday, 21 May,...

Coventry BS maintains status as one of the best workplaces

Coventry Building Society has been named one of Great Place to Work's UK’s Best...

Atom bank breaks Near Prime record

Atom bank has reported another record-breaking month for Near Prime activity. Over the course of...

Berkeley Alexander appoints new BDM

General insurance provider Berkeley Alexander has announced the appointment of Grant Robinson as a...

Other news

Lenders must step up on high LTV products

Things are on the up for borrowers with a smaller deposit. The financial information...

Square 1 Media announces May Mortgage Market Debate

Square 1 Media is to hold its next Mortgage Market Debate on Wednesday, 21 May,...

Coventry BS maintains status as one of the best workplaces

Coventry Building Society has been named one of Great Place to Work's UK’s Best...