The investigation into Mr Chadda’s conduct commenced on the making of the bankruptcy order following a petition presented by the FCA.
Mr Chadda was a sole trader using the names Red2Black Homes and B&L Homes. The investigation uncovered that between July 2009 and January 2010, Mr Chadda induced property owners experiencing financial difficulties to enter into SRB agreements by providing them with false and misleading information and concealing his own personal gain.
His failings included deliberately misleading the sellers by purporting to be the purchaser when in fact the purchasers were third parties unknown to the sellers, assisting these purchasers to obtain mortgages knowing that they had failed to inform the mortgage lenders that the purchase was made on an SRB basis, and failing to notify the sellers that these purchasers were not authorised or regulated by the FCA.
The FCA fined Mr Chadda £945,277 and banned him from working in the financial services industry as a result of his significant failings. This was the largest ever FCA fine for a sole trader in a retail business. In levying the fine, the FCA believed that Mr Chadda received £695,277 from arranging 7 SRB agreements and incorporated this amount in the fine.
Mr Chadda also made false and misleading statements to the FCA and failed to disclose documents and information and produced false and misleading documents. Mr Chadda also arranged for people to impersonate his customers in order to further mislead the FCA.
Ken Beasley, Official Receiver of the Public Interest Unit (North), said:
"Mr Chadda’s actions were dishonest and he took advantage of vulnerable members of the public for personal gain. The length of the undertaking reflects the severe nature of the misconduct. The Insolvency Service will continue to bring action against those who pose a serious risk to customers and lenders alike."
