FCA bans broker for fraud that led to client entering liquidation

The FCA has banned David Robert Cooke from carrying out any regulated activity after receiving a police caution for insurance fraud that led to the collapse of a client.

Cooke, who had been a director at Weston-super-Mare-based broker Professional Construction Risks, setup a public liability policy for a client on 19 October 2019, knowing that the funds would not be passed onto the insurer.

And when the client tried to make a claim in 2020, they discovered that they were not insured, causing the company to enter liquidation.

The FCA said Cooke later admitted that he committed fraud in that he dishonestly made a false representation, with him receiving a caution from police on 28 February 2023.

Now, the regulator has decided to make an order to ban Cooke from performing any function in relation to any regulated activity carried on by an authorised person, exempt person or exempt professional firm.

The case

At Professional Construction Risks, which is in liquidation, Cooke was responsible for insurance mediation from 2016 to 2018. He was also responsible for insurance distribution from 2018 to 2022.

The FCA said that during a police interview, Cooke confirmed that he had been paid £3,822 by a client in two instalments to setup a public liability policy. The money went into Professional Construction Risks’ business account.

“Cooke confirmed that he had not paid the insurance company and that [the] company thought that it was insured,” the FCA said.

“Cooke stated that he thought that he would pay [the] company back at some point but never did due to financial pressures, Christmas and problems within his marriage and that he was sorry for not paying it back.”

When the client tried to claim on 17 November 2020, they were told that while the policy number quoted sounded like a correct number for the year the policy was purportedly taken out, they did not have an insurance policy.

“This confirmed to [the] victim that [the] company had never been insured as they had been led to believe by Cooke,” the FCA said.

“[The] company suffered a loss of £3,822 in respect of the policy fee it had paid and, due to the lack of insurance, was additionally at risk of incurring potential losses arising from claims against it, which should have been covered by the insurance policy.

“This incident also caused [the] company to fail and it went into liquidation.”

The FCA added that it considers Cooke “not a fit and proper person to perform regulated activities”.