The FSA has fined penny share tipping company Highbury Financial Services Limited 35,000 for the publication of misleading financial promotions.
The fine was for three promotions entitled “The 25 Shares Most Likely to Double in 2004”.
The FSA found these promotions which were published in two national newspapers and one national journal, posed a risk to customers as they created an unrealistic expectation and were unbalanced.
The advertisements focussed on the benefits of investing in penny shares without clear mention of material risks in shares generally and penny shares in particular.
The regulator says false statements were being made including that saying it had used a “panel of financial experts” and received “secret tip offs”, when it had not.
The firm was also found to not not have systems and controls in place to ensure that the compliance officer was appropriately supervised and that he was competent in approving financial promotions.
FSA Retail themes division director Anna Bradley says: “Last week, we published a review outlining for firms our approach to regulating financial promotions, some key issues and our next steps. We will also be launching a website in the near future which will provide further assistance for firms; however, firms must remember that it remains their responsibility to produce balanced, unambiguous promotions that help consumers to make the right choice about the right product at the right time.”