The FSA has fined insurance intermediary, Besso £20,000, for failing to apply for approval of an employee who held a significant management role at the firm when it first applied for authorisation.

The regulatory body said the seriousness of the failing was reinforced by the fact that the employee had previous convictions for fraud and is also alleged to have perpetrated various frauds while he was employed within the Besso group.

The current allegations are the subject of a police investigation.

Margaret Cole, FSA director for enforcement, said: "This case visibly illustrates the potential risks that can arise where firms fail to follow the correct regulatory procedures. It is very important for firms to submit applications for approval at the right time and in the proper way. Other firms should take heed."