FSA fines a mortgage firm £11,900 and bans adviser in relation to false mortgage applications
Jonathan Phelan
Our actions in this case show we are serious about intensifying our crackdown on mortgage fraud.
FSA/PN/070/2008
15 July 2008
The Financial Services Authority (FSA) has fined a Kilmarnock mortgage firm £11,900 for failing to adequately supervise an adviser, resulting in applications containing false and misleading information being submitted to lenders.
The adviser, Ian Sanderson, has been banned from the industry for deliberately entering false information on mortgage applications, and the firm, Mortgage Master (Glasgow) Limited, must review all of Mr Sanderson's mortgage files and inform all lenders and clients of cases where false information has been included in mortgage applications.
Jonathan Phelan, Head of Retail Enforcement at the FSA, said:
"Mortgage Master's systems and control and its supervision of Mr Sanderson were seriously below standard. It is important that firms' senior management take appropriate steps to prevent their advisers from using their firm to commit financial crime. Our actions in this case show we are serious about intensifying our crackdown on mortgage fraud. Firms and their managers will increasingly find themselves at risk of bans and heavier fines if they fail to take the necessary steps to prevent their firms being used for financial crime."
The FSA has also taken into account the following mitigating actions taken by Mortgage Master. It has co-operated fully with the FSA's investigation, terminated Mr Sanderson's employment with the firm and taken advice from its third party compliance consultant and improved its systems and controls to ensure that it operates compliantly in future.
The firm agreed to settle at an early stage of the enforcement proceedings and thereby qualified for a 30% reduction in penalty pursuant to the FSA's executive settlement procedures. Were it not for this reduction the FSA would have imposed a financial penalty of £17,000 on the firm.
Notes for editors
- The Final Notice for Mortgage Master and the Final Notice for Mr Sanderson set out more information about the case and can be found on the FSA website.
- Mortgage Master is authorised by the FSA to conduct mortgage and general insurance business and trades from St Marnock Street, Kilmarnock, Ayrshire KA1 1DZ. Mr Sanderson was previously employed by the firm as an advisor from July 2003 to December 2007.
- This year the FSA has banned 12 other mortgage brokers and one mortgage introducer for involvement in submitting false mortgage applications. Details of the cases are attached:
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.