FSA bans and fines two stockbrokers £275,000
The former chief executive of stockbroking firm Pacific Continental Securities UK, Steven Griggs, and its former finance director, Charles Weston, and also fined them £80,000 and £95,000 respectively for serious failures in the company which led to customers buying high risk shares without suitable advice.
The FSA found that between April 1 2005 and June 20 2007, Griggs and Weston had acted without integrity, and had failed to ensure that customers were treated fairly or that PCS was properly run.
In particular, Griggs had not acted on the fact that his advisers were using high-pressure sales tactics in selling shares to customers and had not stopped advisers exceeding the trading limits on customers’ accounts.
The FSA says the claims made by PCS about its research into the high risk shares were not honest and realistic, and there were not adequate compliance monitoring and training arrangements at the firm.
Weston was also reprimanded by the FSA, as he was also aware that PCS used high-pressure sales tactics and knowingly allowed advisers to continue doing so. He also knew that advisers were recommending shares to benefit PCS, not their customers. He failed to ensure customers’ complaints were suitably handled and he did not ensure the firm and its advisers were complying with their regulatory requirements.
Griggs and Weston were also found to be involved in a boiler room fraud.
FSA director of enforcement Margaret Cole says: “PCS treated its customers appallingly and Mr Griggs and Mr Weston must be held responsible for putting innocent customers at risk. It is especially worrying that no action was taken by PCS or its directors to stop customers from being misled or given unsuitable advice when buying shares, thereby depriving them of their savings.
“This kind of behaviour damages the reputation of the financial services industry and reduces consumer confidence in dealing with regulated firms.
“Other stockbrokers and non-authorised companies who operate in a similar way should take this as a warning that we will take any action necessary to remove them from the industry and to protect customers.”