Financial Conduct Authority
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Darren Newton banned from working in the financial services sector

The Financial Conduct Authority (FCA) yesterday banned Darren Lee Newton from working in the financial services sector. The FCA discovered 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. The FCA has decided that he is not a fit and proper person.

Mr Newton purchased First Step, through his company, from Christine Whitehurst and was the sole director between 18 October 2013 and 28 May 2014 of First Step and was 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, were banned by the FCA in October 2017 for dishonestly misappropriating money.

Mr Newton knew these monies from First Step should only have been used to pay customers’ creditors or to be returned to customers. He did this 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 shortfall of £7,156,036 from over 4,000 customers. Customers are not able to recover compensation for their losses from the Financial Services Compensation Scheme.

Mark Steward, Executive Director of Enforcement at the FCA yesterday said:

'Mr Newton blatantly used customers’ money to fund the purchase of First Step from Christine Whitehurst. This was dishonest and showed a complete lack of integrity. First Step was meant to help people manage their debts, but Mr Newton’s actions put them one step backwards and in a worse position than before.

'He is not a fit and proper person and poses a serious risk to consumers. This is the strongest action we can take and will prevent him from operating in financial services again.'

First Step was a debt management firm offering a debt reduction services 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 for Editors

  1. Final Notice 2018: Darren Lee Newton
  2. Mr Newton referred the Decision Notice, dated 21 March 2018, to the Upper Tribunal on 16 April 2018. On 5 October, his reference was struck out through Mr Newton’s non-compliance with the Tribunal Procedure Rules.
  3. Press notice relating to Adrian and Christine Whitehurst.
  4. 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.
  5. Debt Help and Advice did have interim permission by the FCA.
  6. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has 3 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.
  7. Consumers who need advice on managing their debts can contact the Money Advice Service(link is external), a free and impartial service set up by the government. You can contact them online(link is external) at or by phone on 0800 138 7777. Calls cost no more than to a standard UK-wide number.
  8. Find out more information about the FCA.

 

Channel website: https://www.fca.org.uk/

Original article link: https://www.fca.org.uk/news/press-releases/darren-newton-banned-working-financial-services-sector

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