A former insurance broker has been banned from working in the financial services industry by the Financial Services Authority (FSA) after financial irregularities and fraud occurred at his firm. Mr Harbinder Panesar was the director of Motorcare Elite, an insurance firm that specialised in motor breakdown cover. However, an FSA investigation discovered that Mr Panesar had misappropriated substantial funds from two insurance broker firms that he had run over a number of years. The FSA investigation also discovered that Mr Panesar had missold products to his customers and that he had sold products which were outside the scope of cover offered by the underwriters of his business.

After a series of complaints the FSA commenced an investigation in 2010. This investigation found that between 2008 and 2010 Mr Panesar misappropriated over £180,000. It also found that Mr Panesar allowed his firms to sell relevant policies to customers after its relationship with underwriters had ended, had failed to report the details of policies accurately to insurers, and had sold policies which were outside of the scope of coverage offered by his underwriters. He was also criticised for the sale of his product “Supreme Plus”, which “fundamentally failed” to meet the needs of his business’ customers. These failings had left over 6,000 customers without the motor breakdown that they had thought that they had purchased.

Mr Panesar was subsequently prosecuted by the FSA after the investigation and instructed a criminal defence lawyers. This prosecution found that Mr Panesar had been “reckless” in his business approach and that he had broken a number of FSA rules. This resulted in a fine of £212,237. The FSA recognized that Mr Panesar may have difficulty in paying the full fine of £212,237 as he had recently been discharged from bankruptcy. However, the FSA also stated that his misconduct was so serious that it would not reduce the penalty and would force him back into bankruptcy if necessary.

Ms McDermott, director of enforcement and financial crime at the FSA, stated that: “Mr Panesar has left a trail of destruction…. misappropriating funds, acting recklessly towards consumers, and taking two firms into liquidation”. She further went on to emphasize that Mr Panesar’s actions posed a risk to consumers, other market participants, and to confidence in the financial system as a whole.

Mr Panesar did not comment on the case.

Direct 2 Lawyers offer expert advice from experienced criminal defence solicitors. If you’ve been accused of a financial crime then contact us today.

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The Direct 2 Lawyers Criminal Law Team post daily on interesting criminal law cases, Crown Court decisions and Royal Courts of Justice judgments. All of the Criminal Law Team’s posts are written by qualified specialist solicitors

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