Another Director Hit by FSA Fine as Powerchex Recommend

Failing to disclose employee lies result in firm being punished

London, August 26th, 2009. The FSA has fined the director of an IFA for failing to disclose
that an approved person had lied about the reason for leaving their previous job.
The FSA fined Christopher Davies, Director of Newquay Investment Services Limited,
£17,500 because of an adviser at Newquay who posed an “unacceptable risk of customers
being recommended unsuitable mortgages”.
It was only after Newquay had applied to the FSA for the adviser to be confirmed as an
approved person that Davies became aware that the adviser’s previous employer had
suspended the adviser because of concerns about his business methods and ethics. Davies
spoke to the adviser and concluded that the adviser had lied to him about why he had left
his previous employment, but did not alert the FSA.
The news of the fine comes not long after the FSA fined Richard Holmes, Director of AIF
Limited, for failing to monitor an appointed representative and carry out sufficient
pre‐employment screening checks.
Director of Pre‐employment specialists Powerchex, Alexandra Kelly, believes that the FSA
will continue to crack down on firms but believes those that are most vigilant before hiring
people are the least likely to find themselves in hot water with the FSA.
Kelly said, “Newquay Investment Services Limited could have avoided the situation by
implementing proper pre‐employment screening practices. If they had known about the
advisor’s past before he joined the company they never would have hired the individual in
the first place and most certainly would not have put them forward for approved status. Our
research has shown that the recession has caused people to hide less desirable aspects of
their past and lie more so effective pre‐employment screening is becoming more and more
important.”