In August 2016, the Financial Conduct Authority (FCA) issued a Final Notice confirming that mortgage broker Amir Khan had been banned from the financial services industry.
The regulator had issued a Decision Notice to Mr Khan some three years earlier, outlining the sanctions it proposed to take, but Mr Khan exercised his right to refer the matter to the Upper Tribunal as regards the £80,000 fine the FCA was also proposing to impose.
Despite the Tribunal deciding that the FCA had not proved one of its allegations against Mr Khan, it still ruled that the FCA was correct to prohibit him from carrying out any regulated activity. He would also have been fined £80,000 had he not presented the regulator with evidence that imposing such a fine would have caused him financial hardship.
Mr Khan is the sole owner, director and employee of Sovereign Worldwide Limited. In 2009, he submitted a mortgage application in his own name that included incorrect information about his income, and submitted false payslips in an attempt to verify the false information.
In the application, he claimed that his salary was £60,000 and that he had additional income of £14,500 from buy-to-let properties. However, his tax returns stated that income from these sources was £4,170 and £8,500 respectively. Mr Khan subsequently claimed he was acting on the advice of his accountant, who had told him he would be able to draw an annual income of £60,000 from Sovereign; and also claimed that his accountant had been responsible for creating the false payslips.
The Tribunal rejected Mr Khan’s defence, saying:
“Mr Khan is an experienced financial services professional who on his own admission is aware of the standards expected of persons in that position. Reasonable and honest people would understand the difference between being asked a question about their actual or historic income and what they might be expected to earn in the future. They would have known that stating they had an income of £60,000 from a particular employer when they had never received that sum in the past and were not expecting to do so in the future would be dishonest, even if advised by an accountant that it was legitimate to proceed on the basis of a projected income.
“In any event, the evidence shows that an income of £60,000 per year could not be justified by the financial circumstances of Sovereign at the time; its cash resources of a little less than £30,000 had been built up over a period of four years and it had no long term consultancy contracts at the time the 2009 Application was submitted. Mr Khan must have known that to be the case based on his own tax returns, which he prepared, and the current position regarding consultancy work. Mr Khan must have known that he had never earned £60,000 per annum from Sovereign and that he was not at the time he made the 2009 Application expecting to do so. It must have been obvious to him, based on his experience, that lenders were expecting an answer based on his actual income rather than his projected income. He must therefore have known when he answered the question on the form that his answer was dishonest.”
The Tribunal supported the FCA’s right to ban Mr Khan for this misconduct, as it constituted a breach of the regulator’s Statement of Principle regarding the integrity of approved persons.
The Tribunal also decided, however, that the FCA had not proved a second allegation against Mr Khan, namely that he certified copies of two clients’ passport photos as true likenesses, when in fact he had never met the clients in question.
Sovereign’s permission to conduct regulated activities was cancelled in November 2013. This latest ruling though prevents Mr Khan from trading in financial services using any other name.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.