Milan Vukelic was a former chief executive of Gen Re business unit AltSol

The Financial Services Authority has won its case before the Financial Services and Markets Tribunal (the Tribunal) to ban Milan Vukelic from working in the financial services industry in the UK.

The Tribunal found that Vukelic’s actions whilst chief executive of Alternative Solutions (AltSol) lacked integrity.

The AltSol business unit was established by the General Reinsurance Corporation to develop and market financial reinsurance products. These are complex insurance type contracts that can be misused by struggling insurance companies seeking to disguise their true financial position, the FSA said.

In a statement, the FSA continued: "Mr Vukelic was CEO from August 1997 until October 2002. During that time Mr Vukelic was responsible for overseeing and structuring three different transactions that were designed to allow the client insurance companies to hide very significant losses in their accounts. Mr Vukelic knew that the deals were not genuine reinsurance transactions and that they could be used to mislead the clients’ auditors. Two of the three client insurance companies subsequently collapsed with wide-ranging consequences. The Tribunal found that Mr Vukelic had “turned a blind eye” to the true nature of the contracts and was “reckless as to whether they were intended to mislead auditors and others”.

Margaret Cole, FSA director of enforcement, said: “This case has been fought every inch of the way by Mr Vukelic. We are determined to take whatever action is necessary to ensure that individuals should not avoid the consequence of their actions. The Tribunal rightly criticised his persistent failure to recognise his shortcomings.

“Those carrying out senior functions in regulated firms need to be clear that the FSA will hold them to the highest standards of behaviour and will take action against those who fall short. There is no place in financial services for the sort of behaviour demonstrated by Mr Vukelic.”

Mr Vukelic was an FSA approved person at General Reinsurance Life UK Limited from September 2002 and from November 2002 as chief executive of Faraday Reinsurance Co Limited and later Faraday Underwriting Limited. Mr Vukelic ceased to be an approved person in July 2005

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