A portfolio manager from a large hedge fund that we won’t name (yet) insisted two guys cancel their afternoon meetings one day last week so they could all go to a strip club.

They pair agreed with the PM’s request and hit the club at 3 p.m.  Of course, there wasn’t the usual strip club crowd at that time of day.  In fact, it was pretty much empty.

A spy says group imbibed on gin and tonics and vodka sodas, while strippers danced completely nude to “smooth R&B” music.

We’re told the club charged 10% fee on the credit card and gave the group a cash advance so they could tip the dancers.  Obviously, strippers don’t accept credit for lap dances.

We also hear the hedge fund PM had about five champagne room dances for about $40 a pop.

Here are some pictures taken from inside the club.

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Compensation paid to consumers who were mis-sold Payment Protection Insurance (PPI) reached a record £379m in November, compared with £268m in October.

PPI was routinely sold alongside loans to protect re-payments if the customer fell ill or became unemployed, but many people were sold policies that were invalid because they did not meet the qualifying criteria.

Lenders were under commission for every PPI policy they sold which led to some salespeople misleading customers by telling them that the loan would not be authorised unless PPI was taken out.

Millions of consumers were mis-sold PPI and it is estimated that up to £9bn will be paid out in compensation.

The number of PPI complaints received by the Financial Ombudsman Service (FOS) increased by 10 per cent to 55,907 in the final three months of 2011, compared with the previous quarter.

In November the Financial Services Authority (FSA) and the Office of Fair Trading (OFT) launched a joint consultation on how to prevent the problems associated with PPI being repeated in the replacement products being brought to market.

The consultation closed on 13 January 2012 and specialist Lloyd’s insurer, Jubilee, is pressing for the two agencies to provide regulatory certainty in order to allow the PPI market to grow.

Jubilee’s head of personal lines, Chris Biles, said: “Anything which helps to clarify the responsibilities of both distributor and insurer has to be welcomed.

“But the FSA and OFT must recognise that there is a clear role for both lenders and insurers in helping to ensure that borrowers have access to appropriate ways of reducing the risk of being unable to maintain financial commitments.

“The key will be that any solution is designed to be easily understood and matched to the specific needs of the customer.”

Hedge fund manager David Einhorn and his fund Greenlight Capital were fined 7.2 million pounds ($11.2 million) by the U.K.’s Financial Services Authority, Bloomberg TV’s Dominic Chu reported.

The FSA said that Einhorn’s fund traded stock in Punch Taverns PLC on inside information back in 2009.

According to Sky News’ Mark Kleinman, Greenlight sold shares of the pub and bar operator just three days before Punch Taverns revealed plans to raise £350m from investors. 

Kleinman added that Greenlight had pared back its stake in the company several times before the announcement was made.

Einhorn is known for seeing problems at Lehman Brothers and publicly shorting the stock before the bank folded.

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Insurance firms Direct Line and Churchill have been fined for making alterations to files before submitting them to the Financial Services Authority (FSA).

In 2010 the regulator asked for 50 files to be submitted so that it could assess how the firms handled customers’ complaints.

The request was part of an ongoing inquiry by the FSA into financial firms’ complaint procedures.

Before the files were submitted, managers at both Direct Line and Churchill appointed external accountants to review a sample of complaints, and were advised that 28% were not likely meet the FSA’s required standard.

The two companies therefore instructed staff to check that the closed complaints were completed properly but this led to inappropriate alterations being made.

It was discovered that one employee had forged the signatures of colleagues in an effort to improve the data.

Although the changes were found to be minor and were not to the detriment of customers, the FSA imposed a £2.17m fine on the firms.

Tracey McDermott of the FSA said: “The firms’ management did not know what changes had been made or when [but] it is of critical importance that material provided to the FSA must reflect the picture as it is – not as they might like it to be.”

Paul Geddes, CEO, RBS Insurance said: “We very much regret the findings of the FSA investigation”.

RBS Insurance, which includes Green Flag and Privilege brands as well as Direct Line and Churchill, is being sold by RBS under European regulations.

Earlier this month the company appointed Rick Vlemmiks as chief marketing officer to oversee the restructuring of its insurance brands in order to strengthen their individual identities.

Mr Vlemmiks was formerly commercial director at British Gas.

Complaints to the Financial Ombudsman Service (FOS) from consumers who were mis-sold payment protection insurance (PPI), increased by 57 per cent to 30,301 between October and December 2010, compared with the previous three months.

PPI complaints now make up 54% of the FOS’s workload.

The FOS, which only deals with PPI complaints that financial firms have failed to resolve, ruled in favour of the customer in 68 per cent of the cases it dealt with in the final three months of 2011.

This is a significant fall from between July and September 2011, when it ruled in favour of the customer in 92 per cent of cases.

Millions of PPI policies were routinely sold with mortgages, loans and credit cards from the 1990s.

The insurance is designed to meet credit payments if the policy holder is unable to pay due to illness or unemployment, but millions of people were sold policies that were invalid because they did not fulfil the qualifying criteria.

Some policies were sold to people who did not need them and many people did not realise that the insurance was optional.

For years the banking industry refused to admit that PPI had been mis-sold, but was forced in May 2011 to adhere to the Financial Services Authority’s (FSA’s) demand that past sales of the policies should be reviewed.

The FSA also said that future sales of PPI should be much more strictly regulated.

Earlier this month the FOS said it was disappointed at the number of customers still waiting for financial companies to deal with their PPI complaints.

It is considering introducing a fee of £350 for dealing with PPI cases, which firms would have to pay in addition to a £500 standard case fee.

The FSA’s report into lending, due to be published next week, is expected to include proposals to help home owners in negative equity.

The Council of Mortgage Lenders estimates that one in 12 homeowners are in negative equity, with their home now worth less than the price they paid for it, making it impossible for them to move house.

This can be a serious problem for growing families or for people who need to move because they have secured a new job outside their area.

Under the FSA’s new guidelines, homeowners would be able to remortgage to buy another property without having to immediately pay off the balance they owe on their current home.

In effect, this would mean they could move their negative equity to their new mortgage.

However, it is believed that this option may only be open to homeowners who have kept up to date with their mortgage payments.

It is hoped that relaxing the rules would ease the current shortage of first-time buyer properties and help to get the housing market moving again.

The FSA’s report, which follows a two-year inquiry, is also expected to include some tougher regulations on lending, designed to stop a repeat of the lending practices that led to the credit crunch in 2007.

Before the financial crisis, it was easy for house purchasers to borrow up to 125 per cent of the price of the property; in contrast buyers now usually face a minimum mortgage deposit of 5 per cent, while deposits of up to 20 per cent are not unusual.

In related news, Datamonitor’s latest research suggests that gross annual mortgage lending will fall from an estimated £138.5 billion in 2011 to just £127 billion in 2012.

However, gross mortgage lending is expected to increase in 2015 to £182 billion.

The research also suggests that more people will consider building their own properties, with mortgage advances for self-build properties expected to increase by 141 per cent, from £790 million in 2011 to £1.9 billion by 2015.

The Council of Mortgage Lenders (CML) expects the number of house repossessions to increase by 21.6 per cent from 37,000 this year to 45,000 in 2012 due to an increase in unemployment and falling household incomes.

The CML also expects housing transactions to fall next year, with 825,000 homes expected to be sold compared with an estimated 852,000 this year.

This would represent the lowest level of property sales since records began in 1978.

The CML has reduced its forecasts for gross mortgage lending to £138 billion for 2011, from a previous forecast of £140 billion.

It has also cut its forecast for 2012, from £150 billion to £133 billion due to increasing economic weakness.

Mortgage lending, especially to first-time buyers has fallen substantially since 2008, and with banks finding it increasingly difficult to raise funds, the CML warns that it may become even more difficult to secure a mortgage.

The government is hoping its planned mortgage indemnity scheme will help first-time buyers secure mortgages, but reservations have been expressed about how effective it will be.

Bob Pannell, chief economist at the CML, said: “Despite the fact that activity levels have already been subdued for several years, we have pencilled in a broadly flat picture, for both mortgage lending and property transactions, at least until real incomes show signs of stabilising as inflationary pressures recede.”

The latest figures from the Financial Services Authority (FSA) show a 5.8 per cent increase in the number of homes repossessed by lenders, from 9,134 in the second quarter to 9,670 in the third quarter of this year.

However mortgage arrears cases fell by 2 per cent to 34,900 in the third quarter, representing a year-on-year decline of 9 per cent, according to the FSA.

The Financial Services Authority (FSA) is introducing new rules which will require banks and building societies to display clear signs at branches and on their websites, telling customers their savings are protected.

The sign will tell savers: “Your deposits are protected up to £85,000 by the Financial Services Compensation Scheme, the UK deposit protection scheme. Any deposits you hold above this amount are not covered.”

The Financial Services Compensation Scheme (FSCS) is an independent scheme established on 1 December 20011 as a compensation fund of last resort for customers of authorised financial services firms in the UK.

It will compensate customers if a bank, building society or financial firm stops trading or has been declared in default and is unable to pay claims against it.

The new rules are designed to improve consumer confidence in the safety of their savings and to raise the profile of the scheme.

Despite a £4m publicity campaign last year, many customers remain unaware of the protection available.

Hector Sants, chief executive of the FSA, said: “The posters and website notices we are going to be mandating will help to prompt consumers to get more information and to make informed decisions about how much money to deposit with one bank.”

Banks which operate in the UK but which are headquartered abroad will have to display signs stating that deposits are not covered by the FSCS and offering information on which other national scheme is providing the protection.

The FSCS has paid out £26 billion in compensation, it was revealed today, representing an average payment of £1,448 for each family in the UK.

The FSCS advises that savers should check their savings are with Financial Services Authority-authorised institution, or they may not be eligible for FSCS protection.