The Financial Services Authority (the FSA) has confirmed in its Final Notice dated 15 December 2010 that Barry Williams, a director at Surety Guarantee Consultants Ltd (SGC), has been fined £25,000 and banned from working in regulated financial services.
SGC, a specialty underwriter, wrote security bond insurance between January 2005 and August 2006. However, SGC:
- made secret profits and withheld two million pounds from its principals, Markel and QBE (through QBE’s agent, Amalfi); and
- exceeded its underwriting authority by writing business in excess of its authorised limits, exposing both Markel and QBE to greater liabilities than what was contracted for.
Although the UK High Court of Justice found that Mr Williams was: (1) not a direct participant of the fraud; and (2) did not directly profit from the fraud, the FSA found that he “deliberately ignored his responsibilities as an approved person“. Furthermore, it became apparent that Mr Williams lied to insurers in order to hide the insurance scheme.
The decision by the FSA gives a clear indication that directors of financially regulated companies cannot simply turn a blind eye to fraudulent behaviour without incurring responsibility and consequences.
Please click here for the FSA’s Final Notice.