FSA bans broker for incompetence

Andrew Goldsmith

December 16, 2009

Mirza was a partner of KS Financial and became an approved person in October 2004. Despite being a partner, she had little knowledge of KS Financial’s mortgage business or the firm’s regulatory requirements. Mirza also had little involvement in the day to day running of the firm. During its investigation, the FSA found that Mirza was absent for long periods due to illness. However, she had failed to properly delegate her significant influence responsibilities in this time.

As a result of her failings, Mirza did not perform her role as a partner to the required regulatory standard. Her incompetence put the firm’s customers at the risk of being treated unfairly and left the business open to threats of financial crime.

Margaret Cole, FSA director of enforcement and financial crime, said: “Mirza was incompetent and acted as an ‘absentee partner’ putting both KS Financial and its customers at risk. Engaging with the day to day running of the firm and how your customers are treated are important aspects of being an approved partner of a regulated business.

“Partners are responsible for making sure that their businesses are properly managed and must inform the FSA if they can no longer meet their responsibilities. Our action shows how seriously we expect senior management to take their roles. We will not hesitate to take action against anyone who fails to carry out their regulatory roles as required.”

Mirza’s failings were identified through the FSA’s assessment programme for small firms.

The FSA also considered fining Mirza but in this case, based on verifiable evidence she provided, a fine would have caused severe financial hardship. As a result, the FSA decided not to impose a fine.

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