A Conservative MP has not been formally disciplined despite breaching rules on declaring interests after being lent £150,000 by a businessman for a rental property and then writing to a financial watchdog to praise the same person.

An investigation by the parliamentary commissioner for standards, Kathryn Stone, concluded that David Warburton, the MP for Somerton and Frome in Somerset, broke the MPs’ code of conduct twice.

But it found that he did not breach rules on paid advocacy in writing to the Financial Conduct Authority on behalf of Roman Joukovski, as he did not seek any action on behalf of the businessman.

Warburton, who had the Tory whip suspended earlier this year over separate claims of sexual harassment and drug use, which he denies, will not face any sanction, having apologised and agreed to amend his register of interests.

He lost the whip in April after the claims of sexual harassment, reportedly from three women, and the publication of a photo showing him allegedly sitting alongside lines of cocaine.

Stone’s investigation found that Joukovski, a financial adviser who specialises in offshore tax advice, had lent Warburton £150,000 in 2018 via Castlebrook Associates, a Seychelles-registered company.

Warburton told Stone the loan was to help pay for a property that he and his wife wanted to buy to let. After they were unable to get a normal loan, Warburton told the inquiry, Joukovski said he could provide “a commercial loan from his business, as he was a good friend and I was stuck”.

The inquiry heard that Warburton said he did not register the loan because it was “entirely unconnected with either my role as an MP or any parliamentary activities”.

Stone disagreed, saying the MP should have done so “because an onlooker might have reasonably thought that at the time the loan was provided it had the potential to influence Mr Warburton’s words or actions as a member”, meaning he had breached the section of the MPs’ code of conduct about registering interests.

Warburton then wrote to the FCA in March 2021 on parliamentary stationery. The inquiry did not publish the letter in full, but it cites a Sunday Times report, not disputed by the MP, quoting him as telling the watchdog that he was sending “a reference on behalf of Roman Joukovski”, adding that “in my judgement he is extremely capable and an honest and straightforward person whom I trust”.

The letter did not mention the loan. Warburton told Stone that “it wouldn’t have occurred to me to mention any financial link – however tenuous and however unrelated to a personal reference for a friend – in a private reference letter”.

Stone decided Warburton had breached the MPs’ code over registering interests, but not a section on paid advocacy because the letter “did not suggest that the FCA should take any positive action in respect of Mr Joukovski, nor did it make any representations on Mr Joukovski’s behalf”.

Sources told the Guardian in April that after the loan, Warburton introduced his wife’s uncle, the businessman Rodney Baker-Bates, to Joukovski. Baker-Bates was subsequently offered a £75,000-a-year advisory role at Dolfin, the business Joukovski founded. This was not mentioned in Stone’s report.

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