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UK FCA fines Towergate for failings in handling client money


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UK FCA fines Towergate for failings in handling client money

The U.K. Financial Conduct Authority levied a fine of £2.6million on Towergate Underwriting Group Ltd. for irresponsible handling ofclient and insurer money between June 2005 and December 2013.

The regulator said it also fined Timothy Philip, formerdirector and client money officer at Towergate, £60,000 for failure "toexercise due skill, care and diligence in managing the business for which hewas responsible."

Among other failings, the FCA found that on four occasionsPhilip instructed or approved withdrawals of money from Towergate's client andinsurer money bank accounts without following due procedures which resulted inaccumulated deficits of £5 million in the client money bank accounts and £5.5million in Towergate's insurer money bank accounts.

The FCA noted that Towergate first identified that there wasa shortfall in its accounts in May 2013 but only by November 2013 of did thecompany plug the shortfall despite regulations requiring any shortfall to becorrected on the day the firm performs its client money calculation. Towergatealso failed to report the shortfall immediately to the FCA.

Both Towergate and Philip agreed to settle at an early stageof the FCA's investigation, thereby qualifying for a 30% discount on theirfines. The regulator also banned Philip from exercising any directresponsibility in client and insurer money.

Towergate Insurance, which is the trading name ofTowergate Underwriting Group Ltd., is a unit of