The Financial Services Authority (FSA) has fined Scottish insurance broker Donald McKee Morgan, a partner of Donald Morgan Insurance Services (DMIS), GBP335,204 for committing insurance fraud.
Morgan has also been banned from performing any regulated financial services activity in the future.
The watchdog also publicly censured the broker’s wife, Janet Morgan, who was the only other partner at DMIS, and banned her from carrying out regulated financial services.
FSA said that Mrs Morgan took no active part in the affairs of the firm, and failed to notice her partner’s fraudulent activity.
The watchdog found that Donald Morgan deliberately kept insurance premium payments from a number of DMIS’s clients which should have been paid to a broker network.
In order to conceal his fraudulent conduct, Donald Morgan falsified monthly reports and manipulated the computer systems at DMIS and then used the premium monies to pay staff salaries and to fund his lifestyle.
In August 2010, Morgan informed the FSA of his misconduct and after that he realized he could not repay the money he had misappropriated.
The financial penalty consisted of a punitive element of GBP112,700 and GBP222,504 for disgorgement of financial benefit.