The Financial Conduct Authority (FCA) has decided to ban Alec Finch and Robert Finch from working in UK financial services after the High Court found they had engaged in fraud and misused client money while at AFL Insurance Brokers Limited (AFL). The FCA's Decision Notices have been referred by both individuals to the Upper Tribunal, where each will present their case, and the findings in those notices remain provisional.
According to the FCA, the High Court judgment dated 27 September 2023 led it to conclude that Alec Finch and Robert Finch failed to act with honesty and integrity in their roles at AFL. The regulator found that the father and son used client money to fund AFL's business expenses and later took steps to conceal this misuse.
Misuse of client money and false records
The FCA states that Alec and Robert Finch misapplied client funds to support AFL's operations. When they later sought to sell the business, they allegedly made AFL appear more financially attractive by creating false financial records. These records were used to mislead the prospective buyer as well as AFL's own accountants and auditors.
By concealing the misuse of client money and overstating AFL's financial position, the pair left the firm with a significant client money deficit. The FCA characterised their conduct as a serious fraud, with the High Court finding that the Finches were the driving force behind all aspects of the misconduct.
Regulatory response and sanctions
Therese Chambers, the FCA's joint executive director of enforcement and market oversight, said the Finches had painted a false picture of a successful business and used client money for their own benefit, knowing it was wrong. She emphasised that the FCA would not tolerate serious misconduct and would act to remove wrongdoers from the industry.
In August 2020, the buyer of AFL commenced High Court proceedings against Alec and Robert Finch, seeking loss and damages based on allegations of fraud. The FCA's enforcement action follows the Court's judgment in those proceedings.
The FCA noted that both Alec and Robert Finch provided verifiable evidence that any financial penalty would cause them serious financial hardship. Otherwise, the regulator would have imposed penalties of £121,200 on Alec Finch and £169,800 on Robert Finch.
AFL subsequently changed its name to Ambon Brokers Limited and is no longer authorised by the FCA.
