A Derry financial advisor has blamed his “stupidity” for the actions which led to being banned from his profession by the Financial Services Authority.
Gareth Flanagan, the former sole owner and director of Derry based financial advisory firm GMF - trading as Principal First has been fined £95,200 for knowingly submitting mortgage applications in his own name containing false information.
Between December 2005 and November 2007, Mr Flanagan submitted nine mortgage applications to lenders in his own name, five of which were completed for funds totalling £1.33m, according to the FSA.
However, the FSA identified that eight of the applications contained false information regarding income, residence, employment status and purpose of the mortgage.
Among other explanations, Mr Flanagan attributed the inconsistencies to “stupidity rather than dishonesty”.
In one case Mr Flanagan stated in a note that “capital raising to purchase holiday home” as the reason for applying for remortgage. However, it later emerged that the money had been invested in GMF. When the lender asked Mr Flanagan about the note, he said that was not the purpose of the application and that a staff member must have selected the wrong option from an online drop-down menu, an explanation that the FSA stated was “clearly impossible” due to the note being hand-written by Mr Flanagan.
In another case, during a five week period between October and November 2006, Mr Flanagan submitted five mortgage applications in which he declared three different income figures of £190,000, £94,000 and £250,000.
In May 2010, a mortgage lender removed GMF from its lending panel after finding irregularities in 15 mortgage applications concerning customers’ income, employment and address. Two of the mortgage applications in question were in Mr Flanagan’s name.
The FSA has found: “Mr Flanagan is not a fit and proper person, in that he lacks integrity and is not competent or capable of performing his controlled functions at GMF. Therefore, the FSA considers it appropriate and proportionate in all the circumstances to withdraw all the approvals given to Mr Flanagan to perform controlled functions at GMF, and to make an order prohibiting Mr Flanagan from performing any regulated activity carried on by any authorised person, exempt person or exempt professional firm.”
Speaking to the Derry Journal yesterday, Mr Flanagan hit back at claims made in the media that he committed fraud: “I have not been convicted or accused of fraud. I am taking legal advice on the matter, and a formal complaint has been lodged with the FSA. They have now formally acknowledged my complaint, which is being dealt with by the FSA’s Corporate Services Department.”
Mr Flanagan is now neither employed by or a shareholder in GMF which is under new management and ownership. Derry accountant Patrick Durkan has taken up the post of Managing Director forthwith. He said: “We offer our clients a quality financial service and seek to grow the business.” Sara Fish, Operations Director, added “Treating Customers Fairly is central to our culture.
“We have built rigorous processes to ensure we live up to our values of being trusted, committed and personal.”