The FSA is consulting on proposed guidance relating to TLPIs. The FSA does not consider them appropriate for retail customers because among other reasons their product structures are complex and opaque; they carry high levels of risk and may be illiquid; and many are based offshore without recourse to the FSCS or FOS.
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The FSA fined a compliance officer £14,000 and banned her from performing any significant influence function in regulated financial services for breaching Principle 6 of the FSA's Statements of Principle for Approved Persons. Although aware of investors' concerns and the resignation of the prime broker the FSA concluded that the compliance officer had not properly investigated the matter or acted on the information.
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The FSA fined McInroy & Wood Limited a discretionary investment management firm £15,050 for breaching both Principle 10 of the FSA's Principles for Businesses and the FSA's client money rules contained in the Client Assets sourcebook.
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The FSA fined John Folan £195,117 for insurance fraud and prohibited him from carrying on regulated financial services. Mr Folan was a director and adviser at Key Mortgage Associates and submitted at least 54 applications for life assurance and protection policies in his and other family members' names without their knowledge and in some cases with falsified signatures leading to the generation of substantial commission.
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The FSA fined IFA plc, a wrap platform, £3.5 million for failures in relation to its protection of client money. The FSA found that the firm had not carried out any internal reconciliations between 2001 and 2010 with the result that clients were cross-funding other clients. The firm also failed to put in place adequate trust documentation.
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The FSA fined HSBC £10.5 million because of inappropriate investment advice provided by one of its subsidiaries to elderly customers. This is the largest ever retail fine. Over a period of five years the subsidiary advised nearly 2,500 customers to invest in asset-backed investment products, particularly investment bonds, to fund long-term care costs. A 3rd party review found unsuitable sales in 87% of cases where in particular the customer's life expectancy was less than the five-year investmen ...
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Following a report by a bank of suspicious activity where the bank's suspicions turned out to be groundless, the account holder brought a claim for damages on the basis of the bank's delay in processing the transactions. Shortly before the trial the claimant sought to amend the case to allege bad faith against one of the bank's employees. Following disclosure that allegation was withdrawn and instead sought to amend the reply to allege that an employee in the bank's compliance department and ano ...
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The FSA fined David Bedford and prohibited him from performing any regulated function with effect from 2 November 2011. Mr Bedford was responsible for running the financial risk division of ESR Insurance Services Limited and was approved to perform CF 1 function. He placed surety bonds and other insurance on behalf of ESR clients with a third party. He became aware that the third party was accepting premiums, but not placing the insurance. He continued to advance premiums and thereby facilitated ...
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The FSA fined Credit Suisse £5.95 m for systems and controls failures in relation to sales of structured capital at risk products. Over a 3 year period Credit Suisse customers invested over £1 billion SCARPs. The FSA found that there were serious failings in the sales including inadequate systems and controls in relation to assessing customer's attitudes to risk; failing to take reasonable care to evidence properly the suitability of SCARPS for customers; and failing to monitor staff effectively ...
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The FSA imposed its biggest individual fine to date on an Indian investor in respect of the manipulation of the closing share price of a Reliance Industries in order to mitigate losses under a structured product which fell to be determined by the closing price. The FSA fined Mr Goenka $9.6 million.
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