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Hargreaves fined for failing to warn investors on zero

Hargreaves Lansdown Asset Management has been fined by the FSA for selling its Hargreaves Lansdown Secure Growth Portfolio for a period in 2001.

The Secure Growth Portfolio was a specialist portfolio of zero dividend preference shares which HL closed over two years ago.
A statement from the group said the FSA believes that HL was too slow to realise the correlation between falling stock markets with a corresponding impact on the risk profile of certain holdings in the portfolio and communicate the impact on the risk profile of the Secure Growth Portfolio to investors.

The FSA action does not include any allegation concerning the structuring, management or pricing of any zero in the portfolio nor collusive behaviour.

HL has offered compensation to all investors in the Secure Growth Portfolio who lost money over a set period, whether or not they have made a formal complaint.

The firm says it is not one of the 21 firms widely reported to be under separate investigation for collusive behaviour relating to the design and sale of zeros.

HL chief executive Peter Hargreaves says: “We very much regret the public reprimand of Hargreaves Lansdown Asset Management in relation to the operation of the HL Secure Growth Portfolio. This is the first in 23 years of business and you can be certain that steps have been taken to guard against such a situation arising again.”


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