The Financial Services Authority (FSA) has fined former Finance Director at Royal Liver Assurance Limited (RLA), George McGregor, £109,000 for entering into contracts on behalf of RLA without authorisation and which benefitted a former RLA employee. The FSA determined that McGregor’s behaviour merited a fine of £1,000,000 but reduced the amount because this level of fine would cause serious financial hardship. McGregor is also prohibited from performing any function in relation to any regulated activity in the financial services industry.
Between May 2009 and November 2009 McGregor entered into contracts on behalf of RLA with two companies which were controlled by a former employee of RLA. McGregor was negotiating the former employee’s bonus but thought that the amount he had agreed with the individual would not be approved by RLA’s Board. McGregor therefore sought to conceal the level of bonus by entering into the two contracts to pay substantial sums to the former employee’s companies.
McGregor abused his position in RLA. He withheld this information from RLA and circumvented systems and controls for approving contracts which he himself had been instrumental in implementing.
McGregor also falsified the signature of RLA’s CEO in order to process monies relating to these contracts. This resulted in RLA paying at least £3.6m to the two companies and incurring a possible contractual liability of up to £18m.
Tracey McDermott, acting director of enforcement and financial crime, said:
“McGregor abused his position of responsibility and engaged in a dishonest, deliberate and sustained course of misconduct. McGregor failed to act with integrity and is not a fit and proper person to work in the financial services industry.
“Those who take on the responsibility of being an approved person should be in no doubt about our commitment to take the strongest action to tackle behaviour which falls below the high standards we expect.”
McGregor co-operated fully with the FSA and agreed to settle at an early stage and in doing so qualified for a 30% discount on the financial penalty.
Notes to editors
- Read the Final Notice for George McGregor.
- McGregor was in breach of Principle 1 of the FSA’s Statement of Principles and Code of Conduct for Approved Persons (APER).
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system.
As the financial regulator for the UK, we use a wide range of rule-making, investigatory and enforcement powers to fulfill our statutory objectives.
Our powers and objectives are given to us by the Financial Services and Markets Act 2000 (FSMA). We also aim to promote efficient, orderly and fair financial markets and follow our principles of good regulation.
We are an independent body and we receive no government funding – we are funded entirely by the firms we regulate. However, we are accountable to the Treasury and, through them, Parliament.