View more on these topics

FSA bans three stockbrokers

The FSA has banned and censured three directors of stockbroker Simply Trading Group Limited from senior management positions for falling short of regulatory standards.

The directors, Luke Ryan and Michael Yamoah, shared responsibility for the management of STG and escaped fines of £17,000 each due to financial hardship.

The firm was a small private client advisory stockbroker in London and Hampshire which specialised in telephone sales of securities traded on the London Stock Exchange, as well as higher risk securities traded on the AIM and PLUS markets through its two appointed representatives.

As a consequence of the action the FSA has taken against the directors of STG, the firm no longer meets FSA requirements and has therefore been cancelled with the agreement of the directors.

The FSA found the directors relied too heavily on an external compliance consultant for advice on how to run their business, failed to make sure that STG met regulatory requirements, including capital resource requirements and implementing adequate systems and controls and also failed to adequately monitor their two appointed representatives, creating a serious risk that customers may have received unsuitable investment advice.

This included a failure to ensure that call monitoring equipment was in place at one of the appointed representatives.

The problems at STG were initially identified by the FSA as part of its high pressure selling thematic project, which is ongoing and which will continue to result in disciplinary action being taken against firms where appropriate.

This is the ninth completed enforcement investigation resulting from an ongoing FSA thematic project looking at the selling practices used by small firms when recommending higher risk shares.

FSA director of enforcement and financial crime Margaret Cole says: “Senior management of firms are responsible for the standards and conduct of the businesses they run. As directors of Simply Trading Group Limited, Stephen Coles, Luke Ryan and Michael Yamoah failed to discharge this responsibility.

“We believe that Coles, Ryan and Yamoah would pose a serious risk to consumers and to confidence in the financial system if they were to act as senior managers in an authorised firm. For this reason, they have been prohibited from carrying out any senior management roles in the future.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Fair do’s ~ but when you consider just where all the highest profile regulatory risks seem to be, by comparison with the one sector which, by all measurable data and other parameters, not to mention anecdotal evidence, represents the very lowest regulatory risk, then just why is the FSA so hell bent on kicking the guts out of the IFA sector? Isn’t regulation supposed to be proportionate and appropriately targeted? Isn’t that what it says in the Statutory Code of Practice or Regulators?

  2. Stockbrokers suffering financial hardship. What is wrong with the world?!!

Leave a comment