The FCA has provisionally banned father and son Alec and Robert Finch from UK financial services after the High Court found they had engaged in fraud and misused client money.
In light of a High Court judgment, dated 27 September 2023, the FCA provisionally decided that the father and son had failed to act with honesty and integrity in their roles at AFL Insurance Brokers Limited (FRN 505029).
The High Court found the duo misused client money to fund AFL’s business expenses.
The ban on the pair is provisional as both have appealed the decision to the Upper Tribunal.
The FCA said that when the pair had tried to sell AFL, which was based in Dalbeattie, Kirkcudbrightshire, Scotland, they made the business appear more financially attractive by creating false financial records to mislead buyers, as well as their own accountants and auditors.
They concealed the misuse of client money and overstated the firm’s financial position, leaving AFL burdened with a significant client money deficit.
AFL subsequently changed its name to Ambon Brokers Limited and is no longer authorised by the FCA.
The FCA said that both Alec Finch and Robert Finch provided verifiable evidence that the imposition of a financial penalty of any amount would cause them serious financial hardship, otherwise the FCA would have imposed a financial penalty of £121,200 and £169,800 respectively.
The Upper Tribunal (Tax and Chancery Chamber), which will consider the appeal, is an independent judicial body which has the power to overturn FCA decisions in relation to financial penalties, market abuse cases, withdrawal of authorisations, and prohibition bans. It can uphold, dismiss, or modify the regulator’s decisions.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: "The High Court found that the Finches were the driving force behind every part of this serious fraud. They painted a false picture of a successful business and used client money for their own benefit – which they knew was wrong.
"We will not tolerate serious misconduct and will take action to remove wrongdoers from the industry."
The High Court proceedings were commenced by the buyer of AFL which was looking for an award for loss and damages against the father and son duo. The allegations centred on fraud allegations against the pair.