The former finance director of Royal Liver, the mutual life assurer, has been fined £109,000 and barred from working in financial services ever again by the City regulator.
George McGregor forged his chief executive's signature on contracts he wrote to pay a former colleague £3.6m. He was sacked by Royal Liver last year, and the Financial Services Authority yesterday said he would have been fined £1m but for his poor financial circumstances.
The regulator said McGregor had forged chief executive Bill Connolly's signature twice , resulting in the firm paying at least £3.6m to two companies owned by a former employee. In fact, the contracts meant that Royal Liver, which was taken over by rival mutual Royal London last year, had a potential liability of up to £18m.
Tracey McDermott, acting director of enforcement and financial crime, at the FSA said: "McGregor abused his position of responsibility and engaged in a dishonest, deliberate and sustained course of misconduct. He failed to act with integrity and is not a fit and proper person to work in the financial services industry."
Royal Liver discovered the unauthorised payments during a routine audit in December 2009 and suspended McGregor before sacking him in April 2010. It informed the FSA and said it was looking at ways of recovering the money.
The FSA found that as finance director he had been responsible for negotiating the bonus pay-off for a former employee.
But he thought the amount he had agreed with the employee wouldnot have been approved by other members of Royal Liver's board,so decided to conceal the bonus by entering into contracts with two companies controlled by the former employee.
When the former employee's companies sent in their first invoices (each for £1.8m), they were far above the level he was authorised to sign of £500,000 so he forged chief executive Connolly's signature.