The FCA said Newton used customers’ money for the purchase of the debt management firm, First Step Finance Ltd, stating: ‘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.’

First Step was a debt management firm offering a debt reduction service to its customers. It collected and held client monies before making full and final settlement offers to customers’ creditors.

The FCA said Newton purchased First Step, through his company, from its previous owner 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 Ltd.

After the purchase of First Step customers were meant to be transferred to Debt Help and Advice, but this did not happen. First Step continued to receive payments from existing clients until it was placed into administration in May 2014, at which there was a client money shortfall of £7,156,036 from over 4,000 customers.

The FCA said Newton funded the purchase of First Step from the accounts of First Step, using client money, rather than his own funds. He directed or allowed £322,500 to be transferred from the First Step accounts to Whitehurst, who with her husband, Adrian Whitehurst, were banned by the FCA in October 2017 for dishonestly misappropriating money from First Step.

Further, the FCA considers 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 £6m.

Newton is disputing the FCA’s decision and has referred the matter to the Upper Tribunal at which the FCA and Newton will be able to present their cases. The ban will be stayed pending the determination by the tribunal.

FCA decision notice for Darren Newton is here.

Report by Pat Sweet