A stockbroking firm in liquidation has been censured for breaching Principles 1, 3, 6 and 11 in connection with advice on and sales of high risk securities; the fine would have been £2,000,000. It misled customers as to the extent of its research, its advisers engaged in high-pressure selling practices and conducted trades in excess of trading limits and failed to establish adequate compliance monitoring systems. The firm’s strategy was to offer free research reports by way of mail shots and financial promotions. When customers returned a consent form, they were telephoned to open a trading account and a broker made investment recommendations (Pacific Continental Securities (UK) Limited (in liquidation), (PDF 178KB), 27 January 2009).
The chief executive and finance director were prohibited and fined £80,000 and £95,000 respectively for a lack of integrity, failure to ensure customers were treated fairly or that the firm was properly run (Steven Geoffrey Griggs, (PDF 202KB), 27 January 2009 and Charles Richard Francis Weston, (PDF 109KB), 31 July 2008).
A plc was fined £245,000 for a 78 day delay in disclosing information regarding a variation to a distribution agreement which reduced its estimated profits for 2008 by a significant percentage (a shortfall of around £8 million against market consensus of £73.5 million), in breach of DTR 2.2.1 and Listing Principle 4. The company had delayed an announcement because it considered there would be opportunities to mitigate the impact of the variation but had asked the CFOto prepare a quantification report and appointed corporate finance advisers (Entertainment Rights plc, (PDF 109KB), 19 January 2009).
An IFA has been fined £28,000 for inadequate suitability letters which failed to explain recommendations and risk (Legacy Financial Planning Limited, (PDF 103KB),16 January 2009).
A mortgage broker has been prohibited having knowingly submitted inaccurate mortgage applications. When the FSA had previously raised concerns about his fitness, he had voluntarily withdrawn his approved status but retained day-to-day control of the business (John David Cook, (PDF 82.8KB), 26 January 2009). The firm’s part IV permission was also cancelled: its only director lacked the requisite competence and agreed to withdraw his approval; its sole shareholder and senior mortgage adviser was unfit (Stone Financial Management Limited, (PDF 58.4KB), 26 January 2009).