HIH collaborator cops lifetime ban from UK regulator
The UK financial regulator has won a long drawn-out case against a former reinsurance executive whose sham transactions helped an HIH Insurance subsidiary hide massive losses.
The Financial Services and Markets Tribunal this month ruled in favour of the Financial Services Authority’s (FSA) decision to permanently ban Milan Vukelic from working in the UK financial services sector.
From 1997 until 2002 Mr Vukelic was CEO of Alternative Solutions, a Gen Re unit established to develop and market financial reinsurance products. The FSA alleged Mr Vukelic engineered three “insurance-type contracts” that allowed clients to hide significant losses in their accounts.
One involved FAI General Insurance, which was bought by HIH before it collapsed in 2001.
“Mr Vukelic knew that the deals were not genuine reinsurance transactions and that they could be used to mislead the clients’ auditors,” the FSA said. Two of the three client insurance companies later folded when their true financial position became clear.
The tribunal noted Mr Vukelic “turned a blind eye” to the true nature of the contracts and was “reckless as to whether they were intended to mislead auditors and others”.
FSA Director of Enforcement Margaret Cole says the case “has been fought every inch of the way by Mr Vukelic”.
“The FSA will hold [executives] to the highest standards of behaviour and will take action against those who fall short.”
The Financial Services and Markets Tribunal this month ruled in favour of the Financial Services Authority’s (FSA) decision to permanently ban Milan Vukelic from working in the UK financial services sector.
From 1997 until 2002 Mr Vukelic was CEO of Alternative Solutions, a Gen Re unit established to develop and market financial reinsurance products. The FSA alleged Mr Vukelic engineered three “insurance-type contracts” that allowed clients to hide significant losses in their accounts.
One involved FAI General Insurance, which was bought by HIH before it collapsed in 2001.
“Mr Vukelic knew that the deals were not genuine reinsurance transactions and that they could be used to mislead the clients’ auditors,” the FSA said. Two of the three client insurance companies later folded when their true financial position became clear.
The tribunal noted Mr Vukelic “turned a blind eye” to the true nature of the contracts and was “reckless as to whether they were intended to mislead auditors and others”.
FSA Director of Enforcement Margaret Cole says the case “has been fought every inch of the way by Mr Vukelic”.
“The FSA will hold [executives] to the highest standards of behaviour and will take action against those who fall short.”