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Decimal point error compounds fraud

George McGregor has been banned from working in the financial sector and fined £109,000 for a fraudulent payment made to a colleague, where the error was compounded by a decimal point in the wrong place.

McGregor was a director of Royal Liver insurance company from 2003 to 2010, becoming finance director. He was responsible for the severance bonus to James Stuart-Smith. He decided to inflate the bonus by assigning two contracts to Stuart-Smith on which to calculate the bonus. His mistake was that he calculated the bonus at 0.06% instead of 0.006%. In consequence Stuart-Smith was awarded two bonuses totalling £3.6 million.

When the first invoice for £1.8 million was received, McGregor realised that it would need higher authorisation as being over £500,000. So he covered up by forging his boss’s signature.
Royal Liver reported him to Financial Services Authority in 2009 and sacked him in 2010.

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