The FSA has ordered Park Row’s parent company Royal Liver to pay customer redress estimated at between £5m and £7.8m.
The FSA has also publicly censured Park Row and fined the firm’s former chief executive Peter Sprung £49,000.
Money Marketing first revealed news of the FSA investigation in March 2009.
The FSA says the firm “consistently” failed to take action to rectify the problems despite concerns being raised on a number of occasions.
FSA director of enforcement Margaret Cole says the regulator has secured funding to ensure that where customers were not given suitable advice, or where Park Row cannot demonstrate suitable advice, they will receive redress with support of the firm’s parent company, Royal Liver.
The FSA says the firm’s breaches were severe enough to impose a financial penalty of £2.4m, were it not for the fact that the firm cannot pay such a fine and is currently undertaking an orderly wind-down of its business.