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Release Date: 15th January 2013

To access the original FSA document, click here.


Mr Harbinder Panesar has been subjected to a financial penalty of £212,237 by the Financial Services Authority (FSA) and is prohibited from performing any function related to regulated activities due to serious misconduct. The penalty comprises £88,437 for disgorgement of financial benefits derived from his misconduct and an additional £123,800 as a punitive measure. This final penalty was considered a 30% early settlement discount, without which the total would have been £265,237.

Mr Panesar’s misconduct occurred during his tenure as an approved person performing roles at Warranties from January 2005 to March 2009 and at Elite from April 2010 to December 2010. He breached the FSA’s Statement of Principle 1 by failing to act with integrity. Specific violations include dishonestly misappropriating substantial business funds amounting to £181,444, of which £88,437 occurred while holding controlled functions. His actions involved operating businesses with reckless disregard for the interests of customers and regulatory requirements, exposing customers to significant financial risks. These included inaccuracies in policy reporting, selling unauthorised policies, and continuing sales after the cessation of an underwriter’s facility.

Further aggravating his misconduct, Mr Panesar designed and sold a fundamentally flawed insurance policy named Supreme Plus, which did not meet customers’ needs and left many without valid insurance cover. Additionally, Mr Panesar was found personally responsible for failings at Warranties, involved in contempt of court for breaching a freezing injunction, and displayed a lack of financial soundness, being recently discharged from bankruptcy related to substantial financial liabilities.

The key takeaways for other firms from this enforcement action include the critical importance of maintaining integrity and honesty in operations, ensuring compliance with regulatory requirements, safeguarding customer interests, and upholding transparent and ethical financial practices. Firms must also rigorously monitor their compliance systems to prevent similar breaches and ensure that their business practices do not expose customers to undue risks. This case serves as a stringent reminder of the severe consequences of failing to adhere to regulatory standards and the importance of establishing a robust framework for ethical conduct and compliance within financial services.

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