The FCA has banned Martin Sarl from working in the financial services industry and fined him £5,021 for acting without honesty and integrity. Had it not been for his serious financial hardship, the FCA would have imposed a financial penalty of £63,600 (or £46,000 adjusted for a 30% discount if settled early).
Between 7th November 2017 and 24th October 2019, Mr Sarl, who was the sole director at Perry Prowse (Insurance Consultants) Ltd (Perry Prowse), failed to pass clients’ premiums to insurers, meaning that some customers were left uninsured without their knowledge.
The FCA's investigation uncovered that Mr Sarl used money from the firm’s client account to pay both his personal debt, and that of the firm. This is not allowed under the FCA’s Client Money rules, and these funds should have been kept separate. The Client Money Rules require firms to calculate the amount of client money that should be segregated in a separate client bank account. Firms must segregate the client money until the premium is either paid to the insurer or client money is paid out to a client.
As a result of Mr Sarl’s actions, there was not enough money to transfer the premiums that his customers had paid, leaving customers without cover and at risk of having their home, and car insurance claims rejected.
When customer’s questioned Mr Sarl about their insurance, he knowingly hid the truth, blaming a false 'IT glitch'. At least one customer had a claim refused as a result of no cover being in place.
The failings at Perry Prowse were highlighted in September and November 2019 in the FCA’s first and second Supervisory Notices, with the business entering liquidation in January 2020.
Joint Head of Enforcement and Market Oversight at the FCA, Therese Chambers, said:
'Mr Sarl's customers trusted him to keep their money safe and to secure the insurance cover they needed. Instead, he helped himself to prop up his business and personal finances. He compounded this by lying to his customers.
'This left many people at risk of being unable to make a claim should they have needed to. It is right that Mr Sarl should be banned from the industry'.
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About the author
Rebecca Matyear
Rebecca recently joined us in 2024 as a Senior Content Writer and has experience researching and creating multimedia content. With a keen interest in current and emerging industry affairs, Rebecca responds through a critical lens and, by promoting thought and discussion, aims to increase awareness of UKGI’s work.
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