The Financial Services and Markets Tribunal has upheld an FSA decision permanently banning Atlantic Law senior partner Andrew Greystoke from working in financial services and fining him and the firm £400,000.
Greystoke “recklessly” signed off Atlantic Law’s approval of 50 UK investment advertisements, between December 2005 and March 2007, issued by four unregulated Spanish stockbroking firms without taking reasonable steps to ensure that the advertisements were clear, fair and not misleading.
Greystoke accepted before the tribunal that the Spanish firms were boiler room share scam operators.
He approved their advertisements despite seeing consumer complaints and press articles clearly warning of their activities and despite negative previous experience of acting for other Spanish boiler room clients.
The FSA received 130 complaints from UK consumers who invested a total of over £3m in the scam.
The regulator believes the investors will have lost the majority if not all of their investment and that the true loss is likely to be substantially more as many victims will not have complained.
The advertisements offered free research reports on respectable listed companies.
Greystoke knew the FSA had previously published warnings that this technique was commonly used by boiler rooms to obtain UK consumer telephone contact details.
The FSA says the advertisements were misleading because their true purpose, which the Tribunal found to have been “blindingly obvious” to Greystoke, was to sell shares, whose value he knew to be at least doubtful.
The Spanish companies subjected UK consumers who requested the reports to pressurised selling of high-risk illiquid shares in unlisted small companies. UK consumers who complained to the Spanish companies were subjected to threats and blackmail.
Director of enforcement and financial crime Margaret Cole says: “Atlantic Law and Andrew Greystoke acted recklessly, without integrity and with a complete disregard of the risks to consumers.