Regulator fines stockbroker
January 21, 2008
The UK’s financial regulator, the Financial Services Authority, has fined a city stockbroker over selling risky shares to inexperienced investors and elderly customers. The stockbroker has been fined £250,000 by the Financial Services Authority, which claims that the case is one of the worst it has ever come across. According to reports the stockbroker was using high pressure tactics to get vulnerable customers to invest in risk shares. The stockbroker firm is called Square Mile Securities, and was previously known as Halewood International Futures.
Reports state that the firm should have actually been fined £1.5 million for the breaches that it has been found guilty of, but the poor state of its finances coupled with its willingness to cooperate meant that the fine was reduced to £250,000. Investigations began over the company’s involvement in a variety of high risk companies.
The FSA found that over six hundred customers had been sold £4 million worth of shares in the company in the matter of a few months in 2006, and share prices had quickly plummeted significantly.
An official from the Financial Services Authority stated: ‘We will not tolerate any regulated firm coercing customers into buying financial products or services they do not want or cannot afford.’
One elderly customer was found to have agreed a £25,000 risk limit with the company but his account had been charged £75,000 for transactions that he had not authorized. Another customer was called and hassled about investing, with staff from the firm stating ‘our 20 analysts are excited about the said deal’ when in fact there are no analysts working at the firm.
Officials from the stockbroker firm have now stated that the company is cooperating in full with the FSA investigation, and all traders involved in the breaches have now left the company.
Related Articles
- Stockbroker fined by financial regulator A stockbroker in the UK has been fined by the Financial Services Authority after being found guilty of selling risk shares to elderly and inexperienced
- Severn Trent profits plunge due to fines The profits of water giant Severn Trent have plunged because of the hefty fines that have been imposed by the water regulator Ofwat. The water
- Regulator fines Norwich Union Life According to a recent report Norwich Union Life has been fined by the UK's financial regulator, the Financial Services Authority, over a major fraud incident
- Southern Water gets fined millions Officials from the UK's water regulator, Ofwat, have reported that Southern Water has been fined over £20 million for mis-reporting information and providing poor service.
- FSA calls for greater transparency from its members The UK's financial regulator, the Financial Services Authority is calling for increased transparency from its member, and plans to introduce a paper that is designed
Comments
Got something to say?