UK FCA Moves to Ban Father and Son After High Court Finds…
The UK Financial Conduct Authority has decided to ban Alec Finch and Robert Finch from working in the financial services industry after the High Court found they engaged in fraud and misused client money while running insurance broker AFL Insurance Brokers Limited.
The regulator has issued Decision Notices against both men following the High Court’s September 2023 judgment. The proposed bans remain provisional because both Alec and Robert Finch have referred the FCA’s decisions to the Upper Tribunal, where they will have the opportunity to challenge the regulator’s findings.
The FCA said the case highlights its continued focus on protecting client assets and removing individuals it considers unfit to work in regulated financial services.
High Court Found Fraud and Misuse of Client Money
According to the FCA, the High Court found that Alec Finch and his son Robert Finch failed to act with honesty and integrity during their time at AFL Insurance Brokers Limited.
The regulator said the pair used client money to fund the firm’s operating expenses rather than safeguarding those funds in accordance with regulatory requirements.
When the owners later sought to sell AFL, the FCA said they created false financial records that overstated the firm’s financial position, misleading the prospective buyer as well as the company’s accountants and auditors.
The regulator said the false records concealed the misuse of client money and left AFL with a significant client money deficit.
“The High Court found that the Finches were the driving force behind every part of this serious fraud. They painted a false picture of a successful business and used client money for their own benefit – which they knew was wrong,” said Therese Chambers, Joint Executive Director of Enforcement and Market Oversight at the FCA.
“We will not tolerate serious misconduct and will take action to remove wrongdoers from the industry.”
Decision Notices Referred to the Upper Tribunal
The FCA stressed that the Decision Notices are not yet final because both individuals have exercised their right to refer the regulator’s decisions to the Upper Tribunal.
As a result, the findings contained in the notices remain provisional and reflect the FCA’s current view of the conduct and how it believes that conduct should be characterised until the Tribunal reaches its own conclusions.
The enforcement action follows civil litigation that began in August 2020, when the buyer of AFL commenced High Court proceedings against Alec Finch and Robert Finch seeking damages arising from alleged fraud during the sale of the business.
The FCA’s enforcement case is based on the High Court judgment handed down on 27 September 2023.
Financial Penalties Waived Because of Hardship
In addition to the proposed industry bans, the FCA said it would ordinarily have imposed significant financial penalties on both individuals.
However, the regulator decided not to levy fines after Alec Finch and Robert Finch each provided verifiable evidence demonstrating that any financial penalty would cause serious financial hardship.
According to the FCA, Alec Finch would otherwise have been fined £121,200, while Robert Finch would have faced a penalty of £169,800.
Former FCA Firm No Longer Authorised
AFL Insurance Brokers Limited subsequently changed its name to Ambon Brokers Limited and is no longer authorised by the Financial Conduct Authority.
The case serves as another reminder of the FCA’s continued scrutiny of firms’ handling of client money, an area that remains central to the regulator’s supervisory and enforcement priorities. Misuse of client assets is regarded as one of the most serious breaches of the UK’s financial services rules because it directly undermines customer protection and market confidence.
If the Upper Tribunal upholds the FCA’s decisions, Alec Finch and Robert Finch would be prohibited from performing regulated activities in the UK financial services industry.