The Financial Services Authority (FSA) has publicly censured and banned Michele King, a partner at HD Administrators.
The regulator said King failed to discharge her responsibilities as an approved person through her lack of understanding the nature of HD’s business and its regulatory responsibilities.
It said she did not keep herself involved in, or informed about, the management decisions at the firm.
The FSA said King would have been fined £20,000 were it not for evidence that the penalty would have caused her serious financial hardship.
King became a partner at Sipp operator HD in August 2008. She had previously been employed as an accounts administrator and, before becoming a partner at HD, she had performed some minor administrative tasks at the firm.
In March the FSA took action to stop HD Administrators from operating, and prevented the firm from paying out any funds following arrests by the Nottinghamshire Police of two of the HD Sipp trustees, one of who was also a partner of HD Administrators.
At the time the FSA varied the permission of HD Administrators on the grounds its directors Kathryn Clark and Michele King do not appear to be fit and proper.
Today the FSA said its case against King was part of a wider investigation into the events at HD Administrators which led to its winding up in June 2012. HD Administrators is now in the hands of an official receiver in Manchester.
The FSA said the Serious Fraud Office and Nottinghamshire Police were currently investigating allegations of criminal activity at an unregulated company connected to HD Administrators and the regulator was therefore unable to comment any further on this case.