FINAL NOTICE

TAKE NOTICE: The Financial Services Authority of 25 The North Colonnade, Canary
Wharf, London E14 5HS (“the FSA”) gives you Qadeem Mohammed final notice that it
has taken the following action:

1.
ACTION

1.1
The FSA gave Qadeem Mohammed a Decision Notice on 20 January 2010 which
notified Qadeem Mohammed that the FSA had decided, having taken account of his
written representations dated 30 September and 11 November 2009 and his oral
representations made on 28 October 2009, to take the following action:

(1)
impose on him, as an approved person performing the controlled function of
being a director of an authorised firm, namely 2 Minds Mortgages Limited (“2
Minds”), a financial penalty of £15,000 in respect of a failure to comply with
Statement of Principle 6 of the FSA’s Statements of Principle for Approved
Persons (“APER”) pursuant to section 66 of the Financial Services and
Markets Act 2000 (“the Act”);

(2)
withdraw the approval given to him to perform the controlled functions of CF1
Director, CF8 Apportionment and Oversight, CF11 Money Laundering
Reporting, CF28 Systems and controls and Responsibility for Insurance
Mediation, pursuant to section 63 of the Act; and

(3)
make an order pursuant to section 56 of the Act prohibiting him from
performing any function in relation to any regulated activity carried on by any
authorised person, exempt person or exempt professional firm because he had
fallen below minimum regulatory standards in terms of competence and
capability.

1.2
Qadeem Mohammed referred the matter of the level of financial penalty to the Upper
Tribunal (Tax and Chancery Chamber) (the “Tribunal”) on the ground that paying a
penalty of £15,000 would cause him and his family serious financial hardship. The
Tribunal, in a written decision dated 22 September 2011 (the “Decision”), determined
that the appropriate financial penalty for Qadeem Mohammed’s breach of APER
Statement of Principle 6 should be £25,000, and that the prohibition order should be
based on Qadeem Mohammed’s lack of honesty and integrity as well as his lack of
competence and capability.

1.3
The decision can be found on the Tribunal’s web site.

1.4
Accordingly, with effect from 14 October 2011, the FSA imposes a financial penalty
of £25,000 on Qadeem Mohammed and makes the prohibition order directed by the
Tribunal. Qadeem Mohammed’s individual approval had already been withdrawn by
virtue of the uncontested cancellation of 2 Minds’ permission to carry on regulated
activities.

2.
REASONS FOR THE ACTION

2.1
On the basis of the facts and matters described below the FSA concluded that Qadeem
Mohammed failed to comply with APER Statement of Principle 6, and that he lacked
honesty and integrity and the competence and capability to perform controlled
functions.

2.2
Qadeem Mohammed applied for approval to perform significant influence functions
at 2 Minds because he was asked to do so by the adviser at 2 Minds, his brother
Sarfraz Mohammed. In practice, Sarfraz Mohammed made all business decisions at 2
Minds.

2.3
Qadeem told the FSA that his own role was limited to checking mortgage application
forms for minor omissions. Furthermore, he had no understanding of the roles and
responsibilities of a person who is approved to perform significant influence functions

at an authorised firm. By failing to perform the controlled functions which he applied
for, he increased the risk that 2 Minds could be used to facilitate financial crime.

2.4
Qadeem Mohammed was a director of 2 Minds.

2.5
He was approved to perform the controlled functions of CF1 Director, CF8
Apportionment and Oversight, CF11 Money Laundering Reporting, CF28 Systems
and Controls, and Responsibility for Insurance Mediation, in relation to regulated
activities carried on by 2 Minds.

2.6
In essence, he had no understanding of the business or regulated activities of 2 Minds,
he did not know the names of the shareholders of 2 Minds, he claimed that he had not
heard of another of its directors, Rukhsana Shaheen (who, as was later established, is
his sister), and he could not comment on the activities of 2 Minds’ appointed
representative Edwards Estates Limited (“Edwards Estates”).

2.7
He had no understanding of the roles and responsibilities of a person approved to
perform significant influence functions. His only role had been to act at the direction
of Sarfraz Mohammed and to check the accuracy of facts on mortgage application
forms. In practice he did do not perform any of the functions for which he was
approved at 2 Minds. He delegated all his responsibilities to Sarfraz Mohammed and
neglected to take any steps either to inform himself of the firm for which he held FSA
approval or involve himself in its regulated activities. He therefore failed to act with
due skill, care and diligence in relating to managing the business of 2 Minds, in
breach of APER Statement of Principle 6.

Representations made to the FSA

2.8
Representations were made to the FSA on behalf of Qadeem Mohammed as to the
nature of the firm and the background of the business. It was stated that the FSA
should not rely too heavily on the evidence and assumptions drawn from Qadeem
Mohammed’s interview with the FSA. It was represented that Qadeem Mohammed
was an unsophisticated person and had difficulty in understanding and properly
responding to the FSA’s questions. Therefore, any inconsistencies between his earlier
position and his representations should be disregarded.

2.9
In part as a result of the above, Qadeem Mohammed had not accurately presented his
role in the business. The FSA was told that it was untrue to suggest that he did not
want any involvement in the business and had no understanding of what was required
of him to perform his controlled functions. On the contrary he had asked to be
involved in the family business and had applied to perform significant influence
functions as he intended and did, involve himself in the running of the business.
Nevertheless, it was conceded that Qadeem Mohammed took little, if any part in
making business decisions.

2.10
That aside, representations were made as to the role Qadeem Mohammed took in the
business, including his involvement in checking mortgage application forms and
dealing with client complaints. The FSA was told that he had an understanding of the
regulated activities of the firm and his responsibilities as an approved person. He had
also taken active steps to keep himself updated by receiving regular email updates
from the FSA and attending an FSA road show.

2.11
The FSA was told that Qadeem Mohammed also did not consider it inappropriate that
he relied on the knowledge, expertise and skills of Sarfraz Mohammed in dealing with
the day to day operations of the Firm. Qadeem Mohammed regarded his brother as
having significant relevant experience and the skills and competence to run the
business.

2.12
As a result, Qadeem Mohammed did not believe that he had caused an increased
likelihood of 2 Minds being used for financial crime.

2.13
Qadeem Mohammed confirmed that he was aware that his sister, Nazia Bi, was a
director of the Firm and that Edwards Estates was a company related to the Firm,
although he did not fully understand their legal and regulatory position as an
appointed representative.

2.14
In relation to some of the specific allegations made by the FSA, Qadeem Mohammed
said that he had no knowledge of the two alleged fraudulent mortgage applications. In
these circumstances he argued that there could not be any basis for impugning his
honesty and integrity. In the absence of any motive, he argued the FSA should not
make such allegations against him. Also, he stated that he did not know of Sarfraz
Mohammed’s criminal record or his dealings with the FSA in that he had been refused
approval.

2.15
In the light of the above, Qadeem Mohammed confirmed he was not challenging the
FSA’s proposed withdrawal of approval and prohibition. He acknowledged that he
should have done more to familiarise himself with his regulatory obligations and for
that reason was prepared to make that concession.

2.16
With regard to the proposed financial penalty, Qadeem Mohammed argued that the
fact of his lack of involvement in the two fraudulent transactions indicated a low risk
to the market. It also supported his rejection of the FSA’s assertions that he lacked
honesty and integrity. Qadeem Mohammed also made extensive representations on
his financial circumstances, stating that he did not have the resources to pay the
penalty and that his other personal and financial commitments were such that none
should be imposed by the FSA.

The FSA’s decision on Mr Mohammed’s conduct

2.17
The FSA was not satisfied that Qadeem Mohammed is a fit and proper person as his
behaviour fell below the standard required to perform his controlled functions as an
approved person.

2.18
He abrogated his responsibilities as an approved person by delegating them to Sarfraz
Mohammed. Whatever regulated activities he performed while employed by 2 Minds
were not performed to any level of skill, care or diligence and the FSA did not accept
that he acted as a director of 2 Minds. Regardless of whether or not he in fact
abrogated all or any of his responsibilities did not matter. In this case the impact on 2
Minds and the market was the same. His conduct fell far below that expected of a
director.

2.19
The effect of his behaviour and in particular individuals taking on roles beyond their
capability is that it increased the likelihood of 2 Minds being used as a vehicle for

financial crime. Taking on the responsibility to perform a controlled function means
that the person approved should understand their obligations and perform them to an
appropriate level.

2.20
The FSA also found that he did not satisfactorily answer the FSA’s questions with
regard to his knowledge as to the running of the business. The conflict in his
evidence could not be explained entirely by his proclaimed lack of sophistication and
understanding of such matters.

The Tribunal’s decision on the level of financial hardship

2.21
The only matter referred to the Tribunal was the appropriate level of the financial
penalty to be imposed. In its decision the Tribunal set out in some detail why it
doubted the evidence provided by Qadeem Mohammed about his employment status,
property ownership, bank accounts and personal liabilities. The Tribunal said it
believed, on the basis of “the limited and vague evidence available” to it, that Qadeem
Mohammed was “a man of small means and large family responsibilities”, and it
therefore concluded that a financial penalty of £25,000 would severely penalise him.
However, the Tribunal was not satisfied that it had received enough verifiable
evidence from Qadeem Mohammed to justify reducing the level of penalty on the
grounds of financial hardship.

3.
IMPORTANT

3.1
This Final Notice is given in accordance with section 390 of the Act.

Manner of and time for payment

3.2
The financial penalty of £25,000 must be paid in full by Qadeem Mohammed to the
FSA by no later than 28 October 2011, 14 days from the date of the Final Notice.

If the financial penalty is not paid

3.3
If all or any of the financial penalty is outstanding on 29 October 2011, the FSA may
recover the outstanding amount as a debt owed by Qadeem Mohammed and due to the
FSA.

3.4
Sections 391(4), 391(6) and 391(7) of the Act apply to the publication of information
about the matter to which this notice relates. Under those provisions, the FSA must
publish such information about the matter to which this notice relates as the FSA
considers appropriate. However, the FSA may not publish information if such
publication would, in the opinion of the FSA, be unfair to you or prejudicial to the
interests of consumers.

3.5
The FSA intends to publish such information about the matter to which this Final
Notice relates as it considers appropriate.

FSA contacts

3.6
For more information concerning this matter generally, you should contact Chris
Walmsley of the Enforcement Division of the FSA (direct line: 020 7066 5894/fax
020 7066 5895).

Tom Spender
Head of Department
Enforcement and Financial Crime Division