On February 11, the UK Financial Services Authority (FSA) imposed a Prohibition Order on Mohammed Suba Miah, a former broker at Square Mile Securities Limited, and fined him £21,000 (US$ 41,000).
The FSA determined that Mr. Miah and the firm had failed to act with integrity (breach of Principle 1) and failed to act with due skill, care and diligence (breach of Principle 2). In particular, there was a failure to provide adequate risk warnings and to make adequate suitability determinations; inaccurate and potentially misleading statements were made to customers; and unacceptable sales methods and practices were employed resulting in high and undue pressure on customers to purchase securities which were improperly recommended. An FSA review of Mr. Miah’s transactions between December 2005 and May 2006 found that Mr. Miah had dishonestly recorded the purchase of shares by his customers without their knowledge or consent.
Mr. Miah accepted that his conduct was improper and co-operated with the FSA's investigation. Consequently, Mr. Miah’s fine was reduced by 30% under the FSA's executive settlement scheme. The terms of the Prohibition Order are that Mr. Miah is prohibited from performing any function in relation to any regulated activity carried on by any authorized or exempt firm. That is a ban from working in the financial services industry.
The firm was fined £250,000 (US$ 492,000) for persistently using high pressure sales tactics and misleading information to sell customers shares they did not want or could not afford. This is the second fine on a firm resulting from a continuing FSA thematic project examining sales practices of smaller broking firms with respect to higher risk equity securities. This is part of the FSA’s “treating customers fairly” initiative.