FSA bans and fines fraudulent Broker Network member

The FSA has fined a Scottish broker £335,204 and banned him for committing insurance fraud.

An FSA probe found that Ayrshire-based Donald Morgan Insurance Services partner Donald Morgan deliberately kept client’s premiums that should have been paid to insurers via Broker Network between 2005 and 2010.

The FSA said that he used the stolen money to fund his lifestyle and for staff salaries. He covered his tracks by writing false monthly reports and manipulating his computer system.

Morgan’s wife and business partner Janet Morgan, was also banned from carrying out regulated financial services by the regulator. She took no active role in the company and did not spot her husband’s frauds.

Insurance Times understands that Broker Network confronted Morgan in August 2010, and he gave himself up to the FSA when he realised that he could not repay the money he had taken. The FSA reduced his fine by 30% as a result.

None of his clients went without insurance.

FSA head of retail enforcement Tom Spender said: “Donald Morgan abused his position as an approved person and also abused the trust placed in him by his clients and business partners. Fortunately, his clients were never left uninsured, but his actions were unacceptable and the network suffered significant financial loss as a result.”