FSA fines NI firm

Nia Williams

January 7, 2010

James Ian Shanks, a former partner and mortgage adviser at CFC, has been banned for recklessly submitting false information to lenders.

During its investigation the FSA found that CFC did not have adequate systems and controls in place to counter the risk of customers and staff submitting mortgage applications based on false income and employment information. Furthermore, advisers did little more than superficial ‘sense checks’ on mortgage applicants’ income and employment details.

These failings, combined with CFC’s historically weak recruitment process, led the FSA to conclude that the firm had exposed itself to the risk of being used to facilitate financial crime.

In addition, Shanks was shown to have submitted mortgage applications from CFC’s advisers containing income information that he failed to verify against the firm’s records, despite being aware that such a check was possible.

Margaret Cole, director of the FSA’s enforcement and financial crime division, said: “We expect all authorised firms, including lenders, to take the necessary steps to stop their businesses from being used to commit crime. We also expect high standards from individuals who are approved by the FSA to perform significant influence functions.

“Both Case Funding Centre and Shanks fell short of the standards we expect and they are being punished for their failings. We will continue to take action against any firm or individual who present a risk to our objectives of reducing financial crime and maintaining market confidence.”

CFC and Shanks co-operated fully with the FSA during the investigation and agreed to settle at an early stage. Therefore a 30% discount has been applied to the proposed penalty of £50,000 for the firm.

Shanks was approved to perform ‘significant influence’ functions at CFC.

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