FCA bans fraudulent broker who caused client firm to collapse

The Financial Conduct Authority has banned David Robert Cooke, previously director at Professional Construction Risks Limited, from working in all regulated activity after he committed insurance fraud that led to the collapse of a client firm.

Cooke received a police conditional caution on 28 February 2023 for breaching the Fraud Act 2006 by taking a policyholder's money for a public liability policy and not passing it onto the insurer in October 2019.

Cooke admitted fraud and misappropriating £3,822 given to him by the client to place a public liability insurance policy. At the time he was director of Professional Construction Risks Limited, based in Weston-Super-Mare. The firm’s authorisation was cancelled in May 2022 and is now in liquidation.

So too it would seem, is the commercial client who fell victim to Cooke’s fraud. The client company not only lost the £3,822 policy fee it had paid but, due to being uninsured, was left at risk of incurring potential losses arising from claims made against it. When the client company needed to make a claim under its commercial policy, it did not exist, causing the company to fail and go into liquidation.

The FCA's Final Notice said, "Mr Cooke stated that he thought that he would pay [his client] back at some point but never did due to financial pressures, Christmas and problems within his marriage and that he was sorry for not paying it back."

The case serves as a stark reminder of the wide-reaching implications of fraud. For the relatively small sum of £3,822 initially misappropriated by Cooke, a disproportionate amount of damage was caused. Not only did the client company enter liquidation, but it is unlikely that the third party who was the subject of the insurance claim against commercial customer would have received much for the injury or damage they incurred.