Business 4 min read By Bethany Hadley
FCA bans former HSBC banker over £5,911 train fare fraud
Joseph Molloy, a former HSBC banker, has been banned from regulated finance by the FCA after defrauding Southeastern of £5,911 through a sophisticated 'donutting' fare evasion scheme across at least 740 journeys.
Britain's financial regulator has permanently banned a former HSBC banker from working in the finance industry after he defrauded a train operator of £5,911 through a systematic fare evasion scheme. The Financial Conduct Authority (FCA) barred Joseph Molloy from performing any function related to regulated activity, according to a final notice dated 1 October.
Between October 2023 and September 2024, Molloy set up two accounts with SE Trains Limited, the operator known as Southeastern, using false names, addresses and email accounts to acquire travel cards. He then engaged in a practice known as «donutting», paying only for short journeys at the start and end of his commute while evading the fare for the section in between. The FCA found he did this on at least 740 journeys.
In January, Molloy pleaded guilty at Inner London Crown Court to fraud by false representation under the Fraud Act 2006. On 17 February, he was sentenced to 10 months in prison, suspended for 18 months. The court also barred him from the train operator for 12 months, ordered 80 hours of unpaid work and 10 rehabilitation activity days, and required him to pay £5,000 in compensation to Southeastern, £150 in costs and a £187 victim surcharge.
At sentencing, the judge described the offence as «a sophisticated and determined fraud». The judge said that although Molloy was «clearly in a financial position to pay the fares, you decided to evade them and that causes a loss to the whole of society». The judge added: «In my judgement, this is a high culpability. It is sophisticated, with considerable planning, conducted over a period of almost 12 months.»
Mitigating factors, including difficult personal circumstances, the fact that Molloy stopped of his own volition and genuine remorse, shaped the length of the prison term and the decision to suspend it, according to the notice.
The FCA, which can ban anyone who does not appear to be «a fit and proper person» to work in regulated finance, names honesty, integrity and reputation among its most important considerations and gives particular weight to convictions for dishonesty and fraud. «Mr Molloy's conviction demonstrates a clear and serious lack of honesty and integrity such that he is not fit and proper to perform regulated activities,» the notice states.
The fraud took place while Molloy held his certified functions. The FCA gave him a decision notice on 3 August, and he did not refer the matter to the Upper Tribunal within the 28 days allowed. He also told the regulator that he «accepts that he fell below the standards of behaviour expected by the Authority».
HSBC did not respond to requests for comment, and the FCA directed queries to its notice.
While Molloy's fraud targeted Southeastern, a National Rail operator rather than the London Underground, fare evasion imposes a significant burden on the capital's transit system. According to the London Assembly, Transport for London (TfL) estimated that 3.9% of journeys across its network went unpaid in 2023/24, representing a revenue loss of more than £130 million. TfL now puts the rate at 3.5% and aims to cut it to 1.5% or less by 2030/31.
On the Tube alone, the Centre for Government Reform found an evasion rate of 5.03% in the first three quarters of 2025-26, costing £141 million, according to the Telegraph.
The FCA's action underscores the regulator's willingness to enforce strict standards of personal conduct, even when the underlying offence falls outside the financial sector. For banks and other regulated firms, the case serves as a reminder that employees' criminal convictions for dishonesty can have lasting professional consequences.
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