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FSA fines stockbroker £122,500

The FSA has fined Mansion House Securities Limited £122,500 for giving customers unsuitable and inaccurate advice when selling higher risk shares.

The FSA reviewed 30 recommendations relating to higher risk shares, made by Mansion House between May 2006 and January 2007 and found the firm’s advisers had given customers inaccurate information and failed to highlight the risks associated with the recommended shares. Its advisers also used inappropriate sales practices to pressure customers into buying shares.

The review showed Mansion House had not set up adequate compliance procedures or ensured its staff were properly trained. It has also failed to disclose the commission and charges it received in relation to the shares.

FSA director of enforcement Margaret Cole says: “Customers expect their stockbrokers to give them clear information, make suitable recommendations and not use unacceptable sales practices. In failing to do this, Mansion House treated its customers unfairly. This is our third recent fine against a stockbroker for treating customers unfairly and should be a warning to others that we will not hesitate to take action where it is necessary to protect consumers.”

Mansion House’s failings came to light as a result of ongoing visits by the FSA to assess the practices of small firms when selling higher risk shares.

A Mansion House spokesperson says: “As soon as we learned of the FSA’s concerns we engaged independent compliance consultants who have reviewed and, where necessary, overhauled our controls and procedures. We believe these are now robust, and we are fully committed to treating our customers fairly. Any broker that fails to meet our internal high standards of professionalism and integrity faces disciplinary action.”


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