The Financial Services Authority (FSA), regulator of the British capital market, continues on its quest against irregularities in realty financing operations — the root of the international financial crisis, which started on the other side of the North Atlantic.

On November 5, Homeplan brokers Edward Allen and Ronald Allen were publicly reprimanded by the FSA due to faulty guidance that exposed clients to the risk of inadequate mortgages. The company also lost its operating permit.

The main problems detected at Multiplan were an absence of control mechanisms to guarantee quality of mortgage guidance and a lack of in-depth consumer profile surveys, which would enable adequate recommendations to clients — a procedure known as suitability.

“The FSA had already identified problems in the company’s control structures in a visit made in 2006, but no measures to rectify such deficiencies were undertaken after that”, said Jonathan Phelan, a director at the agency. Initially, the executives were fined £ 15,000 each, but when they proved that they would suffer grave financial difficulty if they paid such an amount, the FSA opted for what is known as “public reprehension” — a form of penalty in which the punishment is making the committed fault public.

It was the third time over the year that the British capital market’s sheriff punished companies that provided inadequate mortgage recommendations. Leybridge, in August, and Orchid Financial, in October, were also hit by the FSA’s heavy hand.