FSA bans insurance boss for auditor indiscretion

A failure to be candid with his company’s auditors has seen former Insure and
Insurance Limited boss James Richardson receive a ban from the Financial
Services Authority.

In September 2004 Richardson told Insure & Go’s auditors that the company
was using a Gibraltar-based travel club scheme to limit the firm’s liability for
Insurance Premium Tax (IPT).

In support of this Richardson provided the auditors with an agreement dated 9
January 2003, but then in November 2004 he claimed the agreement had not been in
existence in 2003.

It emerged that the Gibraltar Scheme did not operate until 2004 and then only
to an ineffective standard. Later Richardson provided information about the
Gibraltar Scheme to the FSA purporting to show that the Gibraltar Scheme had
operated from 2002.

The FSA said Richardson had ‘failed to act with integrity’ and would be
prohibited from performing ‘significant influence functions in relation to any
regulated activity’.

‘It is crucial that chief executive officers and others with significant
influence over the operations of firms display integrity and are candid and open
with their auditors and with regulators,’ said FSA Director of Enforcement
Margaret Cole.

The FSA did not reveal the name of the audit firm.

Further reading:

Directors get liability checklist

Fraud sentencing: getting off lightly

Related reading