The Financial Conduct Authority (FCA) has issued its largest ever fine of nearly EUR1 million to a sole trader for deliberately misleading vulnerable customers for personal gain.
The FCA has fined the mortgage arranger Gurpreet Singh Chadda EUR 945,277, and banned him from working in the financial services industry for significant failings when conducting sale and rent back agreements.
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The FCA said it had investigated seven sale and rent back transactions in June 2009 and January 2012 and found serious failings in all of them.
Birmingham based Chadda, trading under the names Red2Black Homes and B&L Homes, has committed widespread failings including misleading the sellers of the properties, who were his customers, by telling them he would be buying their homes when in fact the purchasers were other people.
He also failed to notify the sellers that these purchasers were not authorised or regulated by the FCA, which meant they were not covered by the regulatory protections.
Chadda also helped purchasers to obtain mortgages in the knowledge that they were giving misleading information to mortgage lenders and falsely claimed that the properties price the sellers would get would be based on an independent valuation.
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By GlobalDataHe misled the sellers about what their properties were worth whilst charging them grossly unfair and excessive hidden fees.
The FCA said Chadda has aggravated his original misconduct by making false and misleading statements to the FCA, failing to disclose relevant documents and creating misleading documents.
Tracey McDermott, director of enforcement and financial crime, said: "Chadda deliberately misled his clients for his own personal gain and then repeatedly and cynically lied to the FCA.
"The unprecedented level of the fine for a sole trader reflects our determination to deprive him of the gains he made as a result of his misconduct.
Fines and investigations
On 12 June 2013, FCA has fined Xcap Securities (Xcap), a retail investment and capital markets business, GBP120,900 for not adequately protecting client money and client assets.
On 5 June 2013, PBI reported that FCA has fined Sesame over GBP6 million for Keydata advice and suitability failings.
Towards the end of May 2013, JP Morgan was fined GBP3.08 million by the FCA for being unable to prove it was giving clients the right advice.
