Brokers and imtermediaries

CML: The future of the intermediary market

November 14th, 2012

A frank discussion at yesterday’s Council of Mortgage Lenders (CML) conference examined exactly how regulation may affect the intermediary market and what the future holds for distribution channels.

The panel suggested that intermediaries have come out of the MMR fairly well, with the biggest change affecting the market surrounding advised sales proposals, which can only help to improve practices.

Advice is the key commodity of intermediaries; the quality of this advice has been worked upon over the past two to three years and means that any focus is now on quality applications, which are more complete and cohesive, and not just quality applicants.

Intermediaries’ relationship with customers is unlikely to fundamentally change, as most professional brokers these days would say that they already carry out a full fact-find with their client; most facets of the consultations have already been taken into account, so there will be few reactive measures to the MMR.

By making advice central to the MMR, intermediaries can benefit as lenders will be more inclined to outsource expertise to distribution firms rather than taking on this burden themselves.

The quality intermediaries that remain in the industry – some 30,000 mortgage intermediaries in 2010 have streamlined to 10,000 – will be there to pick up this business.

There is, however, further work to be done in terms of case submission and intermediaries need to be better equipped to deal with lenders’ requests at an application stage.

In the spirit of regulation, a ‘know your broker’ ethos will be a focus for lenders, who will be closely looking at exactly who is distributing their products and how they are doing so.

Interest only products were another key theme of the discussions; despite their negative press, they have provided valuable niche solutions.

The regulator has obviously attempted to curb the over-selling of such products, which, according to the panel, has resulted in ‘over-reactionary’ measures to stem their widespread use. This may result in a ‘swing-back’ effect – whereby a small growth of sales is seen after such a strong regulatory focus – but this is merely speculative.

But where is the intermediary market heading?

Panellists did not expect a significant uplift in the number of intermediaries entering the market but, in terms of where intermediaries are positioned, there is a move towards larger-sized firms who have their own compliance departments to shoulder some of the regulatory burden.

Ultimately, consumer choice will drive the market and this is exactly what intermediaries can help to facilitate by allowing individuals to access more firms.

In terms of the intermediary demographic, firms are on the look-out for ‘young-blood’ graduates to drive the market forward.

The market is likely to remain strong in the coming years as mortgages are now a commodity; advice is needed because the vast majority are unable to self-select the most relevant product.

Despite the advent of the digital age, consumers aren’t yet ready to complete an end-to-end mortgage transaction online and personal contact is still in demand. There may, however, be a place for such ‘virtual’ deals in the future.

A further part of the ‘know your broker’ ethos is likely to include a bespoke approach to procuration fee pricing; some lenders have already adopted a quality-based commission, but there is yet to be any real consistency in this practice.

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WLB and Brunel broker landmark deal

September 16th, 2011

Brunel Mortgages & Loans, the Swindon based mortgage and secured loan packager, have announced their first completion with Whiteaway Laidlaw Bank (WLB).

The loan was on a hair and beauty salon and arranged in just over two weeks from Decision In Principle to completion.

Whiteaway Laidlaw Bank have recently been in the news after they acquired the specialist lender Link Loans in August.

Rob Derry, Managing Director of Brunel commented: “The customer was working to very tight timescales and with everyone pulling together on this application, the timescales were met with some breathing room. It just goes to show that commercial mortgages don’t have to take weeks and months to complete.

“It’s great to get your first completion with a new lender under your belt. We have worked with the team behind WLB for many years in their previous organization and our experienced staff in the commercial mortgage sector ensured this one progressed to a swift completion. The staff at WLB and the introducing broker, Geoff Dennerley of Maple Leaf in Chester, were a great help in getting this put to bed.”

Geoff Dennerley added that the loan was a good result for the customer and that they were very happy with the outcome and speed of completion.

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Broker vs FSA: The £1.7m battle continues

May 27th, 2011

A broker trying to sue the FSA for libel for up to £1.7 million has requested that their latest defence be rejected.

Adam Lucas, the former owner of People Loans, is suing the FSA for loss of revenue and damage to his businesses reputation.

The broker, who had his regulatory permissions cancelled, has challenged the FSA’s decision due to errors on their part related to the treatment of the case.

Mr Lucas, who claimed in February the FSA libelled him by publishing a defamatory decision notice, has had his ability to conduct regulated business frozen.

Mr Lucas failed to pay £1,349.41 in fees and levies which he owed to the FSA which resulted in the decision to cancel his permission to carry out regulated activities. According to the notice these payments were missed “despite repeated requests”.

After the authority publicised the decision on their website, Mr Lucas claims that this was unjust and there were errors in the handling of the case.

Mr Lucas believes that a case for such a substantial sum should have been held in front of a high court judge.

He also claims the date his permissions were cancelled was May 8 2010, which did not match up with the details published in a press release dated March 9 2010.

He is calling for the FSA’s defence to be rejected because the hearing was held in master’s chambers and not in front of a judge.

Mr Lucas does not believe that he was treated according to the specified guidelines; as well as appearing on the regulator’s website in a press notice, his case was widely reported in financial publications.

The FSA claims it removed the notice dated  March 8 from their website and did not issue a press release regarding the case.

The case continues.

Masthaven – FSA regulated bridging loans

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Buy-to-let: A legal minefield

February 8th, 2011

With all the indicators suggesting that the buy-to-let market is set to either boom or buoy, legal minds advise intermediaries and lenders alike to watch their step before jumping into this potentially hazardous market.

2010’s mortgage market ended on a positive note, with activity surpassing 2009 figures. According to research by Connells Survey and Valuation, increased demand in the buy-to-let market contributed to the promising figures.

Paul Staley, Corporate Services Director of Connells Survey and Valuation, said: “The valuations market has been bolstered by continued growth in buy-to-let investment. More attractive buy-to-let products are entering the mortgage market, and one in seven of our valuations now are for prospective landlords looking to take advantage of improving yields and fast rising rents in the private rental sector.”

The Increased demand and interest that we are seeing in the buy-to-let arena has been, to some extent, caused by the effects of the recession. Most notably we have seen an increase in the number of one-person households, a smaller social housing sector and more problems for first-time buyers. All of these factors mean that there are more people choosing to rent rather than buy.

But surprisingly, lenders are not too keen to offer their funds to this market. Nationwide Building Society subsidiary, The Mortgage Works (TMW), and BM Solutions are the dominant players in the market and all are experiencing a distinct lack of competition.

A smaller lender specializing in buy-to-let, Paragon Mortgages (Paragon), continues to note a significant increase in demand from borrowers and intermediaries, which is not matched by any rapid increase in the number of lenders.

Michael Clark, PR manager of Paragon, said: “Although the number of lenders competing in the buy-to-let market has improved over the past 12 months, there are still significantly fewer lenders than at the market’s peak in 2007.”

The wariness of lenders may be due to the legal difficulties involved at almost every step of the buy-to-let process.

Fraser Sinclair, Partner at Pure Law LLP, explained that incorrectly drafted tenancy agreements and failure to register homes in multiple occupancy (HMO), are the most common sources of legal issues for the inexperienced borrower because different registration procedures and forms apply to different types of properties.

In addition, “Lenders approach the financial calculations slightly differently with buy to let mortgages and their main assessment is whether the rental income adequately covers the anticipated mortgage repayments. Many lenders work on a rental coverage of at least 115- 125% of the mortgage payments,” he said.

From the broker’s point of view, buy-to-let is not particularly hazardous legally, “provided the broker has a sound understanding of residential tenancies and the extra financial information required by lenders.”

However, these ‘extra financial requirements’ are often difficult to meet in the current market, and can leave the investor with a deal that is not what they had hoped for.

Lucy Barrett, Director of Buckinghamshire packager W&B mortgage solutions, said: “The generous lending terms offered historically- such as same day remortgaging- leaves investors with a certain expectation which has been hard to manage. This has led to an increase in activities of property clubs which, in turn, have caused legal headaches with no money down, sale and rentback and general below market value deals becoming more and more exposed to the lenders.”

It seems that lawyers, lenders and intermediaries in the field agree: the increased demand from potential investors in the buy-to-let market is no cause for over-excitement. There are many legal issues associated in the lending process and extra financial requirements which means there is less scope for profit. Consequently, any real buy-to-let ‘boom’ will probably not surface until the UK pulls itself firmly out of the economic dip.

“Key problems in the BTL market are reflective of current lean times and lack of originations, but exaggerated by the need for investors to frequently service their existing portfolios by buying and borrowing further to remedy voids in their stock. This is seen keenly in some of the high profile failures in the last 36 months but to a lesser degree amongst those landlords holding 2-5 properties,” said Lucy Barrett.

“The demand for BTL products is there, and as competition increases again the market will begin to expand, but I think it will be a slow process.”

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Brokers optimistic about business ‘boom’

January 21st, 2011

Around 86% of brokers said they were expecting a rise in business this year.

None of the brokers surveyed by The Mortgage Alliance (TMA) expect business to decrease this year and only 14 per cent expect things to remain steady rather than increasing.

Over 60 per cent of the brokers asked believe that protection will be the biggest area of growth, while 28 per cent think it will be buy-to-let and 20% think it will be commercial.

Phil Whitehouse, head of TMA, said: “Despite predictions of intermediary numbers falling, the results of this survey indicate that directly authorised (DA) brokers are looking to 2011 with a good level of optimism.”

The brokers were also optimistic about the levels of lending in the housing market. Less than 5 per cent of respondents think that the figure at the end of 2011 will be lower than that of December 2010 and 38 per cent actually expect an increase.

Christian Faes, Managing Director of Montello Finance, said:  “We are very optimistic about 2011. It seems to us that the residential property market has definitely stabilised, and that the volume of transactions settling across the board, is increasing. Also, I believe that we will see a continuation of the trend seen last year, where bridging finance in the UK is increasingly becoming a mainstream product. Brokers that understand bridging as an integral part of their client offering, are definitely able to do more business.”

Mr Faes added that he expects the biggest area of growth to be the ‘medium term’ product.

“Many bridging finance companies seem frustrated with the constant grind of keeping funds out on a rotating short-term basis, so those with the weight of money upon them seem to be moving more towards providing medium terms products. This is positive as this should provide more choice to brokers and ultimately borrowers. However, bridging finance will continue to be the growth space for this year. As borrowers (and lenders) become more confident of being able to refinance a bridging loan, and as the product becomes generally more mainstream, borrowers will be more likely to complete on a deal,” he said.

By Katie-Jill Rowland

Source: www.bridgingandcommercial.co.uk

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Dos and Don’ts: Marketing your brand to the financial services sector

December 13th, 2010

This time last year, the term ‘marketing’ was pretty much redundant in the financial services market, as were a number of marketing professionals who found themselves on the wrong side of credit crunch cut-backs.

Whereas back then survival for brokers involved battening down the hatches and diversifying to keep income stream going, and for lenders, having a pot of money to lend and understanding bankers – we are now operating in a different climate.

The market is back on its feet, with new entrants and a renewed sense of competition, so how do you distinguish your brand amongst all the other companies shouting for business?

Clever use of marketing is how, according to well-known marketer, Jeff Knight, who founded marketing consultancy Tonic Marketing Solutions last year.

Speaking with Bridging and Commercial, he said that marketing is still ‘deeply misunderstood’, explaining: “Much of this is to do with companies thinking marketing is just about promotion. It isn’t. In today’s market, most companies can increase their profits by working smarter with their marketing efforts, rather than spending more money.

“People often ask for just one top tip, regarding marketing. This is simple: know your customer. And when I talk about the customer, for many financial services companies this is the broker. Understand their needs and motivations and everything else becomes much easier.”

However, Bridging and Commercial thought we’d give our readers more than one tip. So, below are the Dos and Don’ts of Marketing that Jeff has helped us devise in order to help financial services professionals navigate the new world of putting themselves out there:

Do…

Build your brand from within:

Your brand is everything you say and everything you do, and so it’s vital that all your staff know what your brand stands for – and that it can be described in no more than a few words! – Then ensure you deliver a clear and consistent message to the market, across your email marketing, advertising, website and PR.

Understand your target market:

One of the most important ones, the more you understand the needs of your market – in terms of what they want, why they want it and how they want it to be delivered – the easier and more profitable your market becomes.

Communicate:

The old saying ‘out of sight, out of mind’ is certainly true in terms of marketing. Your broker audience needs to be communicated with often, with engaging language and key ideas. It’s not about blasting them with every single bit of information you have; brokers want the bigger picture, with easy access to more detail if it’s needed. And as brokers receive thousands of advertising messages, yours needs to stand out.

Know yourself:

Know how the market perceives you; it is often different to how you wish to be seen! Know what your core message is, which customers and products are most profitable and, crucially, what you’re trying to achieve.

Innovate:

Explore new ideas and approaches, apply some creativity – it’s the engine room of marketing; it drives every element of marketing, from product design through to application of data – and also make sure to look outside of financial services for inspiration.

Invest in your online presence:

In this digital age, your online presence is increasingly big part of your brand. Ensure your website is easy to navigate and looks good, you only have about four seconds to grab a user’s interest and if you don’t, they’ll soon land on a competitor’s site…

Listen:

It’s not the same as hearing! Listen to your staff and customers, and keep tabs on customer complaints, you can always turn the situation around and make these people into advocates. If you see complaints rising, alarm bells should be sounding and your strategy may need a rethink.

Don’t…

Over promise and under deliver:

Never say that you can do what you can’t, this is especially pertinent in the financial services sector, where many lenders have been guilty of shouting out about their appetite to lend, before swiftly turning down even the tastiest of deal. This is the fastest way to lose clients, not to mention respect.

Don’t get hung up on the term B2B:

The whole business-to-business/broker pigeon hole has led to many companies missing opportunities, simply because they think certain elements of marketing are not relevant to them. The golden rule? Marketing is marketing and brokers are individuals as well as brokers!

Compete on price:

This isn’t sustainable in the long term. Price is easy to emulate, so find lots of other ways to be better than the competition, but in areas that add real value to the market.

Copy the competition:

If you do, you’ll only deliver their goals and not your own, and it’s easy to spot a mile off…

Cut back on marketing:

There are always ways to be cost effective and cut out the waste in business, but many firms make the mistake of cutting back on marketing, which can damage your business – it may not impact sales and profits immediately, but it will curb medium to longer term growth.

Bombard your audience:

Lastly, don’t swing too far in the other direction and annoy your target market. You don’t need to be in their faces every day, choose the right time to go out to them, hit them with useful and interesting information and you’ll never be made to feel like a pest.

For all your bridging finance needs, contact Masthaven on 020 7036 2000

Source: bridgingandcommercial.co.uk

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Apprentice star and mortgage broker appears at police station charged with fraud

December 13th, 2010

A recently fired contestant on the BBC’s business talent show The Apprentice has been charged with four counts of fraud by false representation.

The charges against Christopher Farrell, 29, from Plymouth, relate to allegations that he forged documents, including pay slips and P60s, in a bid to secure mortgages for his clients.

CPS Devon and Cornwall, Senior Crown Advocate, David Gittins, said: “I received a file of evidence in relation to allegations of mortgage fraud in October.

“Having carefully considered all of the available evidence I have decided that Christopher Farrell be charged with four counts of fraud by false representation.”

The mortgage broker, who appeared at Charles Cross police station on December 8, has been bailed to appear at Plymouth Magistrates’ Court on December 22 – the regional paper, Plymouth Herald reported.

He was the first mortgage broker to ever appear on the reality TV show but at the end of November, Mr Farrell, a former marine, was fired after his team failed their task.

The former military man got the boot when his team Synergy, headed by investment banker Chris Bates, lost to rivals Apollo in their task of selling British crisps in Germany.

Mr Farrell was told that he lacked the ‘spark of genius’ required by business guru Lord Sugar.

But Mr Farrell, a former 42 Commando Royal Marines based in Plymouth, defended himself saying he thought it was possible to do well in business and remain ‘nice’.

Lord Sugar told him: “You do work hard. My concern is that you perhaps don’t have that spark of entrepreneurial genius that I’m looking for.”

Mr Farrell added: “Lord Sugar says you can’t be nice in business; that’s one thing I do disagree with him with. Nice people get far in life sometimes.”

Police checks were carried out on Mr Farrell in August of last year, two weeks before he admitted two charges of possessing an offensive weapon.

Police found a knuckle-duster and extendable baton in his Mercedes after being called to his home following an allegation he hit his wife with the knuckle-duster. No official complaint was made.

By Shelley DeBere
Source: www.BridgingandCommercial.co.uk

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Bridging life – things are on the up!

November 5th, 2010

Residential bridging finance has been experiencing something of a renaissance in recent times. The “old” uses of bridging finance such as chain breaking and the day 1 remortgage are now more a distant memory, as the industry has been seriously keeping up to speed with all that has gone on around it.

Renovation and refurbishment, 100% of auction purchase, payment of tax bills and probate property transactions are all recent examples of where bridging finance is being used nowadays. If you use a good bridging lender who also provides second charge facilities, then there really is no better way to gain short term funding.

There have been casualties along the way in the last few years, as indeed there has wherever you look in all aspects of business. The positive spin to come from all this however is the emergence of a new breed of bridging finance providers who are leaner, hungrier and who will “take a view” on a deal as opposed to treating it as a tick box exercise.

So, all is rosy in the bridging finance world? Well, nearly. There is of course the spectre of regulation looming over all of our non regulated heads. What does it mean, where will it go, what will happen? The general consensus of opinion is that the bridging finance market will be regulated at some point, but with all the uncertainty in the financial industry and indeed the political arena, quite when this will be is anyone’s guess.

The role of the broker in residential bridging finance is more important now than ever before. In past times the brokers role was easily defined, as all he or she had to do was highlight a client who required short term funding, and then almost let nature take its course and let the bridging finance provider do the rest.

The exit route is a much tougher aspect to all bridging loans in these days of post crunch, with virtually no sub prime lenders around, which takes out the refinance option for those with a poor credit history. Then there is the residential market which has tightened LTV’s and criteria for the man in the street consumer as well as the BTL professional landlord.

So what should a broker be doing to ease the path of the client through a bridging loan?

Firstly, establish the real reason the client needs a bridging loan. Bridging loans are in essence short term finance for a client who needs to create liquidity quickly. So whether the client needs to raise money for a tax bill, or needs funds to finish a self build project, or, has put their hand up in an auction and has 28 days to find the rest of the purchase price, is bridging the best, and most cost efficient answer for them?

Often the answer is yes, but does the broker know the best way of finding out the real answer? Most lenders lend their bridging funds at anything between 1 and 2% per month, but the client wants to know what the “deal cost” is going to be. The monthly interest rate is only one small aspect of the overall cost of the loan. What about the arrangement fee, application fee, valuation and legal costs? Is there an exit fee, are there early repayment charges? Is the interest applied monthly or daily, and of course what is the broker themselves charging the client?

If the overall “deal cost” of borrowing the money is acceptable to the client, then it is the brokers prerogative to then source which company will actually complete on the deal. Many bridging loan providers will say they will happily take the deal on, then at the last minute change their mind or go cold on the deal thus costing the client money, and more importantly time.

A good broker always gets the facts up front first. A bridging lender will always ask what the ”story” is behind a loan, always questioning why a client wants to pay high fees and costs to obtain the money in a quick time. The hard working broker will furnish the lender with all the answers generally before application stage so that the lender can make an informed decision on day one and proceed to completion quickly and efficiently.

There are brokers out there who very rarely have to resort to bridging finance, and therefore are uncertain if a bridge is best for their clients. This is where the bridging lender can provide that personal service, going through the deal make up with the broker step by step to help highlight the costs and procedures to them so that they can then inform their client if the bridge is really for them or not.

A recent case we had, detailed below highlights this perfectly:

An introducer phoned us with regard to a client he had, asking if we could help because the client was due in court to be repossessed in 3 weeks time. He informed us that the client had had some very bad luck in various build projects that he was undertaking for various clients and he had literally poured all of his own resources into these projects to get them to work, but unfortunately with no success. He owned a fantastic property in the home counties worth £1.6 million that he had developed to a very high standard, and had a £750,000 first charge mortgage on with circa £100,000 in other unsecured and secured debts that he had built up trying to save his own business. Due to the clients bad luck in his projects he had missed the last 6 months payments on all his credit (including his mortgage) and also obtained 3 county court judgements. He was resigned to selling his house, and had indeed moved in with his family for the time being until his “mess” was sorted out.

The solution we came up with for the client was to take a first charge on his house, pay off his mortgage and all other credit, including the CCJ’s so that he could stop his house being repossessed. We deducted all fees and interest from the advance so that the client did not have to pay anything upfront other than valuation and solicitors costs. He then sold the property, paid us back and had around £700,000 to start all over again with. One very relieved client and one happy broker.

There are many roles which today’s broker can take on within the residential bridging finance sector. As mentioned above, debt management is a very big part of why people take out bridging finance, as long as the exit route is via sale of property. Auction purchases where the subject property is in a non habitable state and the high street lender would put 100% retention on it is a great deal for the bridging lender. Second charge deals where the client has significant equity in either their main residence or indeed investment property that they may own is very often a great way to create liquidity very speedily to raise money for a wide variety of purposes like buying property abroad, paying HMRC, finishing a new build property where funds have dried up, purchasing closed pubs to turn into investment properties….the possibilities are endless.

Some recent industry publications will have you believe that there are now less than 10,000 mortgage broker’s actively trading in the UK. If those figures are anywhere near accurate it is a huge decline from the near 40,000 reported pre crunch. Residential bridging finance may only be a small part of today’s broker’s armoury, but it is nonetheless a vital component that he or she must be aware of and use to the best advantage for their clients.

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Estate agents worse for rip-offs than used car salesmen

October 29th, 2010

In a shocking study released by the European Commission it was revealed that estate agents come second to bottom in being the biggest rip-offs in Britain and across Europe.

According to the autumn 2010 Consumer Markets Scoreboard, a market monitoring survey – in both the UK and throughout the EU – estate agents come just in front of financial investments and behind used cars in terms of value for money.

The purpose of the survey is to identify markets that consumers believe are underperforming, with categories including satisfaction, experience of problems and customer expectations and trust – all of which estate agents were ranked poorly in.

John Dalli, EU commissioner in charge of health and consumer policy said: “The great promise of the Single Market is what it can deliver for consumers in terms of lower prices, greater choice, transparency and satisfaction. Thanks to the Scoreboard we can pinpoint the markets where this does not seem to be happening.”

For the first time in 2010, the survey provided data for 50 consumer markets, accounting for over 60% of the consumer household budget, in all 27 EU member states. It based its research among 500 consumers in those countries – all who have recent purchasing experience in each market.

Impressing many consumers across Europe were food and drink, whilst funeral services also scored highly. But other markets with consistently low scores were investments, ‘real estate services’, used cars, internet provision, and railways.

Estate agents were ranked bottom in other European countries including the Czech Republic, France, Luxembourg, Latvia and Slovenia. Despite some low scoring markets, the UK received a higher overall EU ranking due to customer’s satisfaction with credit and mortgage services.

The next step for the European Commission is to launch in-depth investigations into the market areas where the most problems were found across the board and indentify policy areas for improvement.

Mortgage bridging by Masthaven

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Broker banned and fined over £250k for paying kickbacks

October 5th, 2010

The Financial Services Authority (FSA) has fined a broker £252,239 for acting without integrity.

Fabio Massimo De Biase, a former cash equities broker, was slapped with the £252,239 and also banned from working in the financial services industry on the grounds that he is not a fit and proper person.

De Biase was a cash equities broker working at TFS Derivatives Ltd (TFS) and, as part of his remuneration, was paid a proportion of the commission revenue he generated from winning broking business. Between January 2008 and September 2009 he paid £131,000 in kickbacks to Anjam Ahmad, a hedge fund trader at AKO Capital LLP (AKO), in return for Ahmad giving broking business to De Biase.

According to an FSA release, on 20 occasions in 2008 and 2009, Ahmad and De Biase agreed between them that a higher level of commission would be charged to AKO, using enhanced commissions (called ‘declined improvements’). This system was designed to reward exceptionally good performance on the part of the broker, but was used by Ahmad and De Biase to increase the amount of money available to them to split. The standard commission rate was 0.05% or 5bps (basis points), but on these 20 occasions the level of commission averaged 46bps.  This represented an overcharge to AKO of $739,000.

The amount of net commission retained by De Biase under this arrangement was £198,000. The FSA has required De Biase to disgorge this sum as well as imposing an additional penalty.

Over the course of the scheme De Biase also paid Ahmad £131,000. This was the subject of a previous FSA Final Notice.

Margaret Cole, managing director of enforcement and financial crime, said: “De Biase exploited the trust of his employer and his client. This sort of behaviour has no place in the financial services industry. This substantial fine and the ban from working in the financial services industry are significant penalties and should serve as a reminder that such behaviour is woefully short of that expected of approved persons and will not be tolerated.

In determining the appropriate amount to fine De Biase, the FSA took into account his financial circumstances.

De Biase’s behaviour merited the disgorgement of profits, plus an additional penalty element of £500,000, but because this level of fine would cause De Biase serious financial hardship, the level of additional penalty has been reduced. The additional penalty element was reduced to £77,484 on the basis of verified evidence of financial hardship.

Because De Biase agreed to settle this case at an early stage he also qualified for a 30% discount on that figure under the FSA’s executive settlement procedures, reducing the additional penalty element to £54,239.

In a Final Notice on 22 June 2010 Anjam Saeed Ahmad was required to pay the disgorgement of his profits, which amounted to £131,000, for his role in this misconduct.

Separately, Ahmad was also sentenced to 10 months imprisonment, suspended for two years, 300 hours of unpaid work in the community and fined £50,000 for insider dealing.

Masthaven offer a range of bridging loan solutions to brokers and intermediaries

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