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FSA warns of more precipice penalties

Regulators have warned IFAs and company directors to brace themselves for further punishment over precipice bonds.

The FSA says firms should watch for more penalties for firms which missold precipice bonds such as David M Aaron (Personal Financial Planners) which was banned this week. The FSA says it has not closed the file on the firm or its directors.

FSA chief executive John Tiner reiterated at an enforcement conference in London this week that senior management had responsibility for the actions of their firm.

Around 250,000 people are thought to have invested up to £7bn in precipice bonds between 1999 and 2002 and it is estimated that they lost about £2.2bn.

FSA spokesman David Whitely says: “There will be more activity on precipice bonds. We will continue to consider the roles of individuals in the case of David M Aaron – the FSA does have power to take action against individuals.”

“If Aaron wants to trade, he will have to reapply. Every case is taken on its merits but if he reapplies, the fact that his firm was banned for widespread misselling would not look good.”

•Aaron ban, p12;

Comment, p37


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