An independent financial adviser (HNL) has been fined £14,000 for a breach of Principle 9 (Customers: relationship of trust) in relation to the suitability of its investment advice. The FSA had particular concerns in relation to HNL’s bond reinvestment recommendations where customers’ attitude to risk failed to match the risk rating of all the underlying funds and where the suitability reports did not detail all the charges and costs associated with the recommendation. As a result, HNL could not demonstrate that its customers had been provided with adequate information to make an informed decision nor could it demonstrate that its customers had been sold products suitable to their risk profile and personal circumstances. (Henry Neil Limited, 9 September 2009)
The FSA has fined Barclays Capital Securities Limited and Barclays Bank plc £2.45m as a result of a failure to submit accurate transaction reports in respect of an estimated 57.5 million transactions and for the serious weakness in their systems and controls around transaction reporting. The failings were deemed particularly serious because not only did Barclays fail to respond adequately to the findings of a compliance review in this area in 2006 but because the failings occurred despite repeated reminders to firms of their obligations around transaction reporting issues during the course of 2007 and 2008. While the penalty was significant due to the number of reportable transactions affected and the serious impact this could have on the FSA’s ability to detect and investigate suspected market abuse, it was acknowledged that Barclays had subsequently commissioned an extensive review of the transaction reporting process, implemented a comprehensive remediation programme (including establishing a specific team to oversee the remediation and improvement of standards) and initiated an intensive training programme for staff. (Barclays Capital Securities Limited and Barclays Bank plc, 8 September 2009)
The FSA has cancelled the Part IV permissions of two firms (Financial Advantage Limited, 7 September 2009, and Skyline Insurance Brokers Limited, 7 September 2009) and one individual (Peter David Alexander Crane, trading as David Crane Mortgage Broker, 9 September 2009) for failing to pay fines and levies due to the FSA, despite repeated requests. Two further firms (Porchester Finance Limited, 7 September 2009 and Mortgages Plus (UK) Limited, 3 September 2009) have had their Part IV permissions cancelled for failing to notify the FSA of the change of address of their principal place of business, making it impossible for the FSA to communicate with them. Another firm has had its Part IV permission cancelled due to inadequate resources in relation to the regulated activities that it had permission to carry on (White Square Investments Limited, 3 September 2009).