FORMER HSBC EXECUTIVE BANNED OVER TRAIN FARE FRAUD

The Financial Conduct Authority has banned Joseph Molloy, a former head of passive equity at HSBC Asset Management, from working in any regulated financial services role following his conviction for evading train fares. The regulator said on Thursday that Molloy, who has since retired, was not a "fit and proper person" to carry out regulated activities because of a "clear and serious lack of honesty and integrity". Molloy used a fare evasion method known as "doughnutting" across at least 740 journeys over 11 months while commuting on Southeastern Railway between his home in Orpington and Canary Wharf. The FCA imposed a lifetime prohibition order against him.

The doughnutting technique involved buying tickets only for the stations at the start and end of his journey, leaving the middle portion uncovered, using fake names and email addresses to make the purchases. Molloy also fraudulently obtained a Jobcentre Plus discount intended for unemployed people, which allowed him to apply a 50 per cent reduction to ticket prices. The scheme deprived Southeastern of nearly £6,000. He pleaded guilty to fraud by false representation at Inner London Crown Court in January and was sentenced to 10 months in prison, suspended for 18 months. He was also banned from travelling on Southeastern Railway for a year, ordered to carry out 80 hours of unpaid work and 10 rehabilitation activity days, and told to pay £150 in costs, a £187 victim surcharge and £5,000 compensation to Southeastern.

The sentencing judge described the offending as a "sophisticated and determined fraud", saying Molloy was "clearly in a financial position to pay the fares" and that his actions caused "a loss to the whole of society". The judge also noted mitigating factors in Molloy's circumstances at the time. The FCA said Molloy's conviction demonstrated a lack of honesty and integrity incompatible with performing any function in regulated financial services. The prohibition order permanently bars him from the sector.