The Financial Conduct Authority (FCA) has today published a Decision Notice, which sets out its decision to ban Darren Lee Newton from working in any regulated activity in the financial services sector.
Mr Newton is disputing the FCA’s decision and has referred the matter to the Upper Tribunal at which the FCA and Mr Newton will be able to present their cases. Accordingly, this decision notice has no effect pending the determination by the Tribunal.
The FCA found Mr Newton used customers’ money for the purchase of the debt management firm, First Step Finance Limited. This showed a serious lack of honesty and integrity and, as a result, the FCA has decided that he is not a fit and proper person.
The FCA’s case is that Mr Newton purchased First Step, through his company, from Christine Whitehurst and, between 18 October 2013 and 28 May 2014, was the sole director of First Step and a director of another debt management company, Debt Help and Advice Limited. Mr Newton funded the purchase of First Step from the accounts of First Step, with client money, rather than his own funds. He directed or allowed £322,500 to be transferred from the First Step accounts to Mrs Whitehurst. Mrs Whitehurst and her husband, Adrian Whitehurst, were banned by the FCA in October 2017 for dishonestly misappropriating money from First Step.
Further, the FCA considers Mr Newton knew these monies from First Step should only have been used to pay customers’ creditors or to be returned to customers and they were paid to Mrs Whitehurst when First Step had a significant client money shortfall in its accounts of over £6 million.
The firm went into administration on 28 May 2014 with a client money shortfall of £7,156,036 from over 4,000 customers.
First Step was a debt management firm offering a debt reduction service to its customers. First Step collected and held client monies before making full and final settlement offers to customers’ creditors.
After the purchase of First Step on 18 October 2013 customers were meant to be transferred to Debt Help and Advice, from that date. However, the transfer of customers did not take place. First Step continued to receive payments from existing clients until it was placed into administration in May 2014.
Notes to editors
- Decision notice for Darren Lee Newton (PDF).
- Press release relating to Adrian and Christine Whitehurst.
- On 1 April 2014, consumer credit regulation transferred from the Office of Fair Trading (OFT) to the Financial Conduct Authority. On that date firms holding a consumer credit licence issued by the OFT were, on application, automatically granted interim permission to continue trading under article 56 of the Order 2013. First Step did not have a license from OFT at the date and was not granted interim permission by the FCA.
- Debt Help and Advice was granted interim permission by the FCA. The firm is now dissolved after being in administration.
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Consumers who need advice on managing their debts can contact the Money Advice Service, a free and impartial service set up by the government. You can contact them online or by phone on 0800 138 7777. Calls cost no more than to a standard UK-wide number.
- On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA.