Chief executive banned for paying wife

The chief executive of a small mutual insurer has copped two large fines and a ban from the UK's Financial Conduct Authority and Prudential Regulation Authority after he paid his wife close to $400,000 to reduce his personal tax liability.

Stuart Forsyth was chief executive of Scottish Boatowners Mutual Insurance Association and paid his wife more than £200,000 ($380,000) of his own salary.

He claimed the payments were compensation for some administrative tasks his wife had done.

For the first several years of the scheme, Forsyth paid his wife between £5000 and approximately £10000 per annum.

But, after 2010 the amounts Forsyth transferred to his wife increased.

Between 2010 and 2016, Forsyth transferred just over £200,000 of his pay to Mrs Forsyth, and by the 2015/16 tax year, his wife's remuneration was just over £52,000 - more than any other employee of the mutual except her husband.

Forsyth falsified meeting minutes to make it appear as though the remuneration committee had agreed to his wife's payment increases. But in fact, it had only agreed to his salary.

The FCA explained what followed: "In late 2015, after internal concerns were raised about Mrs Forsyth's remuneration, Mr Forsyth inappropriately involved himself in a subsequent investigation by an external auditor."

Forsyth then submitted the falsified meeting minutes in response to a PRA information request.

The FCA has fined Forsyth £78,318 ($149,300) and the PRA has fined him an additional £76,180 ($145,200) he has also been banned from the industry.

Read more: FCAFinancial Conduct AuthorityPRAPrudential Regulation AuthorityStuart ForsythScottish Boatowners Mutual Insurance Association
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