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FCA bans adviser spouses for ‘calculated’ deception

By Kristen McGachey, 12 Oct 17

The Financial Conduct Authority (FCA) has barred John Chiesa and Colette Chiesa, founders of an authorised IFA firm, from ever working in financial services for the “calculated way” they deceived creditors.

Mrs Chiesa has also been fined £50,000 for attempting to mislead the FCA during an interview, the UK regulator confirmed.

The FCA found that the Chiesas had made “inadequate, incomplete and misleading disclosures” to the trustee appointed to establish the value of their assets and liabilities during the liquidation of their IFA business, Westwood Independent Financial Planners.

The FCA first cracked down on the Chiesas for misselling gear traded endowment policies (GTEP products) to customers in May 2011.

Following the action from the UK watchdog, the couple’s advisory business became insolvent and went into sequestration, or bankruptcy under Scottish law.

During the sequestration process, the couple failed to disclose that they were receiving beneficial interest in an unregulated company that was capable of paying more than £1m annually into an off-shore remuneration trust.

This trust paid the Chiesas a total of £2.6m between April 2012 and December 2014, at an average of £84,000 per month, in the form of loans, which the FCA believed were never intended to be repaid.

At the time, the Chiesas were each paying only £200 per month toward their creditors.

By late 2016, the Financial Services Compensation Scheme alone had paid out more than £3.8m to customers who lost “significant sums” from the missold endowment policies.

Living the high life

Meanwhile, the unregulated company continued to fund the couple’s lavish personal and living expenses, including regular rent payments on a London address of around £5,000 per month.

Between October 2011 and July 2013, the FCA calculated that Mrs Chiesas was spending an average of £6,000 per month on clothing, jewellery, interior design, cosmetic dental treatment, travel and her Porsche car.

Mr Chiesas spent closer to £12,000 monthly on flying lessons, tennis tickets, football tickets and club membership during August 2011 and December 2014.

“The Chiesas misled their creditors, especially the FSCS, in a calculated way,” the UK regulator said in a statement on Thursday. “Their misconduct demonstrates a serious lack of integrity.”

Tags: FCA

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International Adviser covers the global intermediary market that uses cross-border insurance, investments, banking and pension products on behalf of their high-net-worth clients. No news, articles or content may be reproduced in part or in full without express permission of International Adviser.