FCA has taken action against Catalyst Investment Group Limited and a number of its key individuals for recklessly misleading investors when promoting bonds. The bonds in question were offered by ARM Asset Backed Securities SA, in Luxembourg. The firm knew ARM had applied for, and been refused, a licence from the Luxembourg regulator, but continued to market the bonds despite knowing this. It did not disclose this fact, nor that there was a risk ARM would be liquidated if it did not have a licence. FCA:

  • publicly censured the firm, which has been declared in default. It would normally have imposed a £450,000 fine;
  • fined the firm's former compliance officer £20,000 for failing to act with due skill, care and diligence in not communicating information about the licence application to investors; and
  • decided to withdraw the approval of the firm's majority shareholder and director, who was also a director of ARM, and to fine him £450,000, and to ban another director and adviser and fine him £100,000. Both these decisions are under appeal.

(Source: FCA Takes Action for Misleading Investors)