Wednesday, 19 June 2013 11:40
FCA issues largest-ever sole trader fine of almost £1m
The Financial Conduct Authority has banned and fined a sole trader almost £1m for deliberately misleading vulnerable customers for his own personal gain.
The FCA said this fine was the largest ever for a sole trader in a retail business.
Gurpreet Singh Chadda of Red2Black Homes and B&L Homes was fined £945,277 for failings related to sale and rent back transactions.
The FCA investigated seven sale and rent back transactions between June 2009 and January 2010 and found serious failings in all of them.
Sale and rent back transactions involve a home owner selling their home then renting it back from the arranger.
Mr Chadda's failings included telling sellers that he would be buying their homes when the purchasers were other people; failing to notify the sellers these purchasers were not protected by the FCA, charging sellers excessive hidden fees; misleading sellers about the value of their properties and helping purchasers obtain mortgages based on false information.
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In three cases the seller receieved less than half the value of their property and it is believed Mr Chadda received £695,277 from the seven transactions.
When investigated by the FCA, Mr Chadda failed to provide relevant documents and arranged for people to impersonate his customers.
Tracey McDermott, director of enforcement and financial crime, said: "Chadda's misconduct is the most shocking we have seen from a home finance arranger. He is a disgrace to financial services. He deliberately misled his clients for his own personal gain and then repeatedly and cynically lied to the FCA.
"Chadda is not fit to work in regulated financial services and he presents a serious risk to customers and lenders alike with his dishonest and unscrupulous actions. The unprecedented level of the fine for a sole trader reflects our determination to deprive him of the gains he made as a result of his misconduct."
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The FCA said this fine was the largest ever for a sole trader in a retail business.
Gurpreet Singh Chadda of Red2Black Homes and B&L Homes was fined £945,277 for failings related to sale and rent back transactions.
The FCA investigated seven sale and rent back transactions between June 2009 and January 2010 and found serious failings in all of them.
Sale and rent back transactions involve a home owner selling their home then renting it back from the arranger.
Mr Chadda's failings included telling sellers that he would be buying their homes when the purchasers were other people; failing to notify the sellers these purchasers were not protected by the FCA, charging sellers excessive hidden fees; misleading sellers about the value of their properties and helping purchasers obtain mortgages based on false information.
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In three cases the seller receieved less than half the value of their property and it is believed Mr Chadda received £695,277 from the seven transactions.
When investigated by the FCA, Mr Chadda failed to provide relevant documents and arranged for people to impersonate his customers.
Tracey McDermott, director of enforcement and financial crime, said: "Chadda's misconduct is the most shocking we have seen from a home finance arranger. He is a disgrace to financial services. He deliberately misled his clients for his own personal gain and then repeatedly and cynically lied to the FCA.
"Chadda is not fit to work in regulated financial services and he presents a serious risk to customers and lenders alike with his dishonest and unscrupulous actions. The unprecedented level of the fine for a sole trader reflects our determination to deprive him of the gains he made as a result of his misconduct."
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