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Tribunal upholds FCA broker fine

Robyn Hall

April 17, 2014

The judgement was issued by the Tribunal on 8 April 2014 after a two day hearing in January 2014. It remains open to Khan to appeal this judgement.

The Tribunal found that Khan had dishonestly submitted inflated income figures to a lender in a personal mortgage application in 2009.

He provided false payslips to the lender in support of this application.

In 2007, Khan had also submitted false income details in an application for a mortgage.

In its decision, The Tribunal said: “In our view the evidence that the behaviour concerned demonstrates dishonesty on Mr Khan’s part is cogent and compelling.”

Having considered Khan’s conduct and heard evidence about the risk of fraud within the mortgage industry, the Tribunal said: “We accept that a substantial financial penalty is required in this case in order to achieve the necessary deterrent effect, bearing in mind the overall prevalence of mortgage fraud, its potential effect on the stability of the financial system, and the position of trust that a mortgage intermediary finds himself in.”

The Tribunal also found that Khan had deliberately disposed of assets to reduce his ability to pay a financial penalty and that he had concealed this from the FCA during its investigation.

The FCA proposed to the Tribunal that Khan’s misconduct merited a minimum penalty of £100,000; the Tribunal considered all of the circumstances and determined that £80,000 was an appropriate penalty in this case.

Khan did not contest the FCA’s finding that he had failed to take reasonable steps to protect his firm, Sovereign, from mortgage fraud risk.

He also did not contest the FCA’s decision to prohibit him from performing any regulated activities.

The FCA will shortly impose this prohibition on Khan by way of a Final Notice.

Sovereign has not been authorised by the FCA since having its permission cancelled on 4 July 2013.

The FCA has continued to tackle fraud in the mortgage market by taking action against unfit mortgage brokers. Since 2006 the Authority has prohibited 112 individuals for misconduct in relation to mortgage fraud.


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