FSA’s tougher stance includes bankruptcy

by Gill Montia

Story link: FSA’s tougher stance includes bankruptcy

The Financial Services Authority’s (FSA) tougher regulatory stance includes bankrupting those who omit to pay their fines.

The regulator has secured a bankruptcy order in the High Court against former East London mortgage broker, Sadia Nasir, for non-payment of a £129,000 financial penalty.

According to the FSA, this is the first time it has taken bankruptcy proceedings for an unpaid fine levied on an Approved Person.

The penalty was set down in July of last year and Ms Nasir has apparently made no serious attempt to pay.

Director of enforcement, Margaret Cole, says: “Nasir was the first mortgage broker to receive a six figure penalty for using her position in an authorised firm to commit mortgage fraud … we are determined to pursue recovery of our penalties by all means available to us.”

Last week, the regulator published proposals that could treble fines for breaches in certain circumstances, saying it wants to ensure penalties reflect the true scale of misdemeanours and claw back profits made in the process.

Under the proposed new regime fines are to be linked more closely to income and will be based on:

Up to 20% of the company’s income from the product or business area linked to the breach over the relevant period;

Up to 40% of an individual’s salary and benefits (including bonuses) from their job relating to the breach in non-market abuse cases.

For individuals in market abuse cases, a minimum starting point of £100,000 is proposed.