Britain's financial regulator won a tribunal case over its decision to ban on an insurance director for operating illegally, the agency said today.
The Financial Services Authority's decision to ban Stephen Fryett after it found his insurance companies purportedly incorporated in Greece and Costa Rica hadn't gotten permission to operate was upheld by the Financial Services and Markets Tribunal in London, the FSA said today. The FSA also banned Richard Baines, a broker that used the companies. Baines didn't appeal.
The tribunal's decision ends a case that dates back to 2003. The FSA got court approval in 2006 to distribute 650,000 pounds ($974,000) to customers who bought insurance from the companies, CIC Greece and CIC Costa Rica, and last year banned David King, the companies' president.
``Around two-thirds of enforcement cases are settled,'' said Chris Brennan, a former FSA lawyer who is now a regulatory specialist at London-based Barlow Lyde & Gilbert. ``It's good to see more cases at the tribunal. If you get the FSA using early settlement and companies buying into it too much, you can get an unhealthy situation where cases are settled for the wrong reasons.''
CIC wrote 1,700 U.K. insurance policies that generated gross premiums of 4.5 million pounds, according to the FSA. Fast-food chains and construction companies that used CIC face losses and even prosecution because they didn't have proper employers' liability cover, the FSA said.
The FSA declined to immediately provide lawyer details for Fryett and Baines. A phone number for Baines wasn't listed in the public telephone directory and one for Fryett couldn't be found.
Fryett made 5,250 pounds a month in commission from Baines' company, Insureyourshop.com Ltd., and an additional 42,000 pounds from an underwriter referred to only as ``Firm B,'' according to FSA documents.
Fryett poses ``a serious risk to consumers and to confidence in the financial system,'' the tribunal's decision said, according to the FSA. ``He has failed to act in accordance with the standards of honesty and integrity which were reasonably to be expected.''
To contact the reporters on this story: Caroline Binham in London at email@example.com
To contact the editor responsible for this story: Anthony Aarons at firstname.lastname@example.org.