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DBS fined for misleading ad

The FSA has fined Misys-owned network DBS Financial Management

£100,000 for misleading advertising it says did not even “come

close” to meeting FSA standards

This is the FSA&#39s first fine for misleading advertising. It says it

penalised DBS for approving an ad for a “protected Isa” and failing

to improve its advertising approval procedures between 2000 and 2001.

Misys bought the DBS network in August 2001 from founder Ken Davy and

other shareholders in a deal worth £75m and it blames the

previous management for the failings.

The regulator says the “Protected Isas” brochure distributed with

four and a half million copies of national newspapers in June 2001

was misleading because it offered “100 per cent capital security over

five years” which only applied at the end of the five-year plan.

The promise of “no initial charge” was found to be false as an

initial charge of up to 6 per cent was levied plus additional

management fees.

Total charges added up to a 4.8 per cent reduction in yield per year.

The FSA said the penalty would have been heavier if DBS had failed to

compensate the 455 investors who responded to the ad or overhaul its

advertising procedures.

DBS managing director Steve Pearson says: “It is very surprising that former

management failed to imp-rove procedures adequately after an earlier

regulatory inspection in 2000. I am pleased to say that since the

acquisition, substantial changes have been made to the management

team and wider operating procedures.”

Davy says: “The whole thing has come as news to me today. As the

former chairman of DBS, I am very disappointed that this

advertisement was approved at the time and I am extremely pleased

that the investors have been compensated.”

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