FSA bans broker for life

He was banned for failing to segregate and protect money from clients’ Insurance premiums.

Target and PISL were run as one business under the control of Marriott who used the client money to support the day to day finances at both failing firms.

He also used client money to give himself and his staff bonuses and salary increases and to purchase a £27,500 car for a fellow director and a £35,000 car for himself.

These payments were made against a background of worsening trading positions and business being lost by Target. His actions led to a client money deficit of £570,841 in the firms.

Under the FSA’s client money rules, firms are required to keep client money separate from the firm's money in segregated accounts with trust status. This helps to protect client money in the event of the firm's insolvency.

Marriott also provided false and misleading information to the FSA in his applications for authorisation to cover up his misuse of clients’ money.

He stated that client money was safe and that a client money audit had been conducted at the firms, when he knew both statements were false.

Margaret Cole, FSA director of enforcement and financial crime, said: “Marriott acted with complete disregard for his clients by using their money for his own benefit when he knew his firms were failing. He flouted regulatory requirements and deliberately misled the FSA about his activities.

“The FSA has repeatedly emphasised the importance of ensuring that client money is adequately protected and recent action in this area shows how our focus has intensified.

“We want firms of all sizes to realise that they must ensure client money is segregated in accordance with FSA rules.”

Simon Gowler, who was also a director of the firms, was fined £5,000 in July 2008 for failing to oversee the firms’ finances and client money controls. Once he became aware of the firms’ trading position, however, he took immediate action.

The FSA considered that, in all of the circumstances, Gowler’s failings warranted a penalty of £15,000, but this was reduced to £5,000 to take into account hardship issues. This reduction is inclusive of an early settlement reduction of 30%.

Marriott was not fined by the FSA due to his financial position.

The FSA has established a new unit to enhance and strengthen its existing capabilities in the area of client money and assets. The unit consists of teams responsible for specialist supervision, policy, data analysis and risk management.