FCA bans husband and wife advisers
The Financial Conduct Authority (FCA) has banned a husband and wife financial adviser duo from working in financial services for “integrity failings” following a string of mis-selling claims.
John Chisea and Colette Chiesa were founding partners of Scottish IFA Westwood Independent Financial Planners, which became insolvent and went into sequestration after the FCA took action over their mis-selling of geared traded endowment policies (GTEP) in May 2011.
Mrs Chiesa was also fined £50,000 for attempting to mislead the FCA during an interview with the regulator.
Westwood, and therefore the Chiesas with unlimited liability as partners of the firm, had a string of “significant” liabilities arising from numerous claims against them filed with the Financial Ombudsman Service, the FCA said.
The Financial Services Compensation Scheme (FSCS) had paid out more than £3.8m by the end of 2016 to Westwood clients who lost “significant sums” as a result of the Chiesas’ mis-selling.
In late 2011, a trustee was appointed to establish the value of the Chiesas’ assets and liabilities, so an assessment could be made which would allow them to pay back their creditors.
But the Chiesas failed to inform the trustee of their financial situation and continued with their lavish lifestyle.
For example, they failed to disclose their continued interest in an unregulated company that was capable of paying more than £1m per year into an off-shore remuneration trust for their benefit, the FCA said.
The regulator said this trust paid about £2.6m to the Chiesas between April 2012 and December 2014, at an average of over £84,000 per month. The payments were in the form of loans, which the FCA believes were never intended to be repaid.
The watchdog also said the unregulated company regularly paid significant personal and living expenses on the couple’s behalf, including rent on a London address of about £5,000 per month.
Mrs Chiesa, the FCA said, spent an average £6,000 a month on clothing, jewellery, interior design, cosmetic dental treatment, travel and her Porsche car between October 2011 and July 2013.
Mr Chiesa, on the other hand, spent on average £12,000 per month on flying lessons, tennis tickets, football tickets and club membership between August 2011 and December 2014, according to the FCA.
During the sequestration process Mr and Mrs Chiesa each paid only £200 per month towards their creditors, it added.
Executive director of enforcement and market oversight Mark Steward said: “The Chiesas misled their creditors, especially the FSCS, in a calculated way. Their misconduct demonstrates a serious lack of integrity.”