This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.
X
MM+301014+small
Categories:Regulation

FSA fines stockbroker £250,000 for high pressure sales tactics

  • Print
  • Comment
Nicole Blackmore

The FSA has fined Square Mile Securities Limited £250,000 for persistently using high pressure sales tactics and misleading information to sell customers shares they did not want or could not afford.

The FSA says it reviewed 55 transactions carried out by Square Mile between March and May 2006, some involving older persons and inexperienced investors.

The regulator’s review found that Square Mile had set up a high pressure sales business that disadvantaged customers and did not have appropriate controls. It also showed that Square Mile knew its advisers frequently used unacceptable sales tactics and sometimes failed to get a customer's consent before selling them high risk shares.

In addition, the FSA says Square Mile made false statements, provided inaccurate and misleading information and failed to disclose important details and significant risks about the shares to its customers. The firm also made recommendations without first ensuring these were suitable for the customer.

Square Mile's failings warranted a fine of £1.5m but this was reduced because of its financial circumstances and its agreement to settle at an early stage of the investigation, according to the regulator.

Square Mile has agreed to send its customers a letter advising them of the FSA's findings which will include information on how they can make a complaint.

FSA director of enforcement Margaret Cole says: "High pressured sales practices are wholly unacceptable. Firms that use such sales tactics undermine the regulatory requirement to treat customers fairly. A firm's customers are entitled to rely on it to provide them with advice and information that is clear, accurate and not misleading.

"The FSA will not tolerate any regulated firm coercing customers into buying financial products or services they do not want or can't afford. We are currently reviewing how stockbroking firms conduct their business and will not hesitate to take action against any that falls short of the standards we expect."

  • Print
  • Comment

Daily Email Updates
If you enjoyed this article, sign up to receive the latest news and analysis from Money Marketing.

The Money Marketing CPD Centre
Build your annual CPD - you can log and plan your CPD hours for free with The Money Marketing CPD Centre.

Taxbriefs Advantage
Advantage is a digital reference source giving unbiased, independent, answers to your technical queries. Subscribe to Taxbriefs Advantage.

Have your sayEdit my profile/screen name

You must sign in to make a comment

Fund Data

Editor's Pick



Poll

Should Sesame unwind the 'pay to play' deals it set up as part of its restricted advice panel?

Job of the week

Latest jobs

View all jobs

Most recent comments

View more comments