The Financial Conduct Authority has banned a husband and wife financial advice team for their lack of integrity.
John and Colette Chiesa, the founding partners of Westwood Independent Financial Planners, misled their creditors after going into sequestration, the term used in Scotland to describe bankruptcy.
They failed to disclose their continued beneficial interest in an unregulated company that could pay more than £1m a year into an off-shore remuneration trust for their benefit.
This unregulated company regularly paid significant personal and living expenses on their behalf, including rent on a London address of around £5,000 a month.
Between October 2011 and July 2013 Mrs Chiesa spent on average £6,000 a month on clothing, jewellery, interior design, cosmetic dental treatment, travel and a Porsche.
Meanwhile between August 2011 and December 2014 Mr Chiesa spent on average £12,000 a month on flying lessons, tennis tickets, football tickets and club membership.
Despite spending thousands of pounds a month, during the sequestration process Mr and Mrs Chiesa each paid only £200 per month towards their creditors.
By late 2016 the FSCS had paid out more than £3.8m to meet the Chiesas’ liabilities to customers who lost significant sums due to Westwood’s mis-selling.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “The Chiesas misled their creditors, especially the Financial Services Compensation Scheme, in a calculated way.
“Their misconduct demonstrates a serious lack of integrity.”
Following action taken by the FCA in May 2011 over mis-selling of geared traded endowment policies, Westwood became insolvent and went into sequestration.
Westwood, and therefore Mr and Mrs Chiesa as partners with unlimited liability in the firm, had significant liabilities from numerous claims filed with the Financial Ombudsman Service relating to the advice offered on GTEP sales.
In late 2011 a trustee was appointed to establish the value of the Chiesas’ assets and liabilities so an assessment could be made to allow them to pay creditors.
But the FCA said Mr and Mrs Chiesa made “inadequate, incomplete and misleading” disclosures to their trustee about their financial situation to avoid the trustee inquiring into, and potentially recovering, assets for the benefit of their creditors.
Earlier this year the FCA won a disclosure case against the Chiesas, who sought an order to disclose all relevant records of its investigation.
But the couple accused the FCA of acting in bad faith and that it sought to “trap” Mrs Chiesa but the judge dismissed the request saying they had no evidence to base it on.
Mr and Mrs Chiesa have both been banned from working in financial services while Mrs Chiesa has been fined £50,000 for attempting to mislead the FCA during an interview.