Insurance: UK's FSA imposes lifetime ban on former CEO
The UK's Financial Services Authority has imposed a lifetime ban on David Marriott, former chief executive of two insurance intermediaries, Target Underwriting Ltd (Target) and Professional Insurance Select LTD (PISL).
The FSA's investigation found that Marriott "failed to segregate and protect money from clients’ insurance premiums."
The FSA says "Target and PISL were run as one business under the control of Marriott who used the client money to support the day to day finances at both failing firms. He also used client money to give himself and his staff bonuses and salary increases and to purchase a GBP27,500 car for a fellow director and a GBP35,000 car for himself. These payments were made against a background of worsening trading positions and business being lost by Target. His actions led to a client money deficit of GBP570,841 in the firms.
"Marriott also provided false and misleading information to the FSA in his applications for authorisation in order to cover up his misuse of clients’ money. He stated that client money was safe and that a client money audit had been conducted at the firms, when he knew both statements were false."
Under the FSA’s client money rules, firms are required to keep client money separate from the firm's money in segregated accounts with trust status. This helps to protect client money in the event of the firm's insolvency.
"Simon Gowler, who was also a director of the firms, was fined GBP5,000 in July 2008 for failing to oversee the firms’ finances and client money controls. Once he became aware of the firms’ trading position, however, he took immediate action. The FSA considered that, in all of the circumstances, Gowler’s failings warranted a penalty of GBP15,000, but this was reduced to GBP5,000 to take into account hardship issues. This reduction is inclusive of an early settlement reduction of 30%. Marriott was not fined by the FSA due to his financial position," said the FSA.
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