The UK Financial Conduct Authority issued Decision Notices against Alec Finch and Robert Finch proposing to ban them from the financial services industry following a September 2023 High Court judgment that found they engaged in fraud and misused client money while running AFL Insurance Brokers Limited. The High Court determined the father and son used client funds to cover operating expenses and created false financial records during the firm's sale to mislead the buyer and auditors. Both individuals have referred the FCA's decisions to the Upper Tribunal, making the proposed bans provisional pending the tribunal's review, according to the regulator's announcement.
High Court Found Fraud and Client Money Misuse
The High Court found that Alec Finch and Robert Finch failed to act with honesty and integrity during their time at AFL Insurance Brokers Limited, according to the FCA. The pair used client money to fund the firm's operating expenses rather than safeguarding those funds in accordance with regulatory requirements, the regulator stated. When the owners later sought to sell AFL, they created false financial records that overstated the firm's financial position, misleading the prospective buyer as well as the company's accountants and auditors, the FCA said. The false records concealed the misuse of client money and left AFL with a significant client money deficit, according to the regulator.
"The High Court found that the Finches were the driving force behind every part of this serious fraud. They painted a false picture of a successful business and used client money for their own benefit – which they knew was wrong," said Therese Chambers, Joint Executive Director of Enforcement and Market Oversight at the FCA. "We will not tolerate serious misconduct and will take action to remove wrongdoers from the industry."
FCA Issued Decision Notices Referred to Upper Tribunal
The FCA stated that the Decision Notices are not yet final because both individuals have exercised their right to refer the regulator's decisions to the Upper Tribunal. The findings contained in the notices remain provisional and reflect the FCA's current view of the conduct until the Tribunal reaches its own conclusions, according to the regulator. The enforcement action follows civil litigation that began in August 2020, when the buyer of AFL commenced High Court proceedings against Alec Finch and Robert Finch seeking damages arising from alleged fraud during the sale of the business, the FCA said. The FCA's enforcement case is based on the High Court judgment handed down on 27 September 2023.
FCA Waived Financial Penalties Due to Hardship
The FCA stated it would ordinarily have imposed significant financial penalties on both individuals in addition to the proposed industry bans. However, the regulator decided not to levy fines after Alec Finch and Robert Finch each provided verifiable evidence demonstrating that any financial penalty would cause serious financial hardship, according to the FCA. Alec Finch would otherwise have been fined £121,200, while Robert Finch would have faced a penalty of £169,800, the regulator disclosed.
AFL Insurance Brokers No Longer FCA-Authorized
AFL Insurance Brokers Limited subsequently changed its name to Ambon Brokers Limited and is no longer authorised by the Financial Conduct Authority, according to the regulator. The FCA stated the case serves as a reminder of its continued scrutiny of firms' handling of client money, an area that remains central to the regulator's supervisory and enforcement priorities. Misuse of client assets is regarded as one of the most serious breaches of the UK's financial services rules because it directly undermines customer protection and market confidence, the FCA said.
FAQ
What did the UK FCA decide regarding Alec Finch and Robert Finch?
The UK Financial Conduct Authority issued Decision Notices proposing to ban Alec Finch and Robert Finch from working in the financial services industry following a September 2023 High Court judgment that found they engaged in fraud and misused client money while running AFL Insurance Brokers Limited. Both individuals have referred the FCA's decisions to the Upper Tribunal, making the proposed bans provisional.
Why did the FCA waive financial penalties against the Finches?
The FCA decided not to levy fines after Alec Finch and Robert Finch each provided verifiable evidence demonstrating that any financial penalty would cause serious financial hardship. Alec Finch would otherwise have been fined £121,200, while Robert Finch would have faced a penalty of £169,800.
