Broker appeals against FSA ban

The FSA has announced that it has decided to ban insurance broker Derek Wright in the first decision of its kind to be publicised before the disciplinary process has been completed.

In a notice dated 23rd February 2011, the financial services watchdog set out its decision to ban Mr Wright from all regulated activity, on honesty, integrity and competence grounds.

The FSA made its decision after finding that Wright arranged for his wife Mary Wright to take on the FSA approved roles while he actually ran the firm, Moorgate Insurance Agencies Ltd (Moorgate), a small insurance broker.

Mr Wright had previously been disciplined by Lloyds of London in 2001, which the FSA believes would have been a highly relevant factor in its assessment of his fitness if he applied for approved person status.

Mrs Wright was not involved in the running of the business at Moorgate and did not exercise her function as a director properly, meaning that he was able to run Moorgate unsupervised and unchallenged by his wife.

The FSA also believes that Mr Wright failed to be open with the FSA about his true role in running the business and although he effectively acted as a director of the firm, he produced poor quality regulatory returns and failed to ensure the firm had adequate resources.

Mr Wright has appealed against the FSA’s decision and has referred his cases to the Upper Tribunal, as will the FSA.

Mrs Wright agreed to be prohibited from all regulated activity and has not referred her case to the tribunal.

The case is the first of two which the FSA has publicised before a tribunal has taken place, using new powers recently granted to the authority by Parliament.

Commenting on the FSA’s announcement, CMS Cameron McKenna partner Simon Morris said: “This is a sign of things to come. The two new regulators will follow the same policy of ‘extreme transparency’ by seeing to make as much noise as possible about their activities and actions. Indeed, the Government's latest plans are to empower the regulators to publicise proposals to take disciplinary action - and not just the disciplinary outcome.”