The FCA has fined Sesame Limited £6,031,200 (including a 30 per cent early settlement discount) for failing to ensure advice given to customers was suitable and failings in the systems and controls that governed the oversight of its appointed representatives (ARs). The penalty is made up of a £245,000 fine for breaching Principle 9 of the Principles for Businesses and the following rules set out in the Conduct of Business (COB) sourcebook COB 5.3.5R, COB 5.4.3R, COB 4.5.2R, COB 9.2.1R, COB 9.2.2R and COB 9.2.3R and £5,786,299 for breaching Principle 3 of the Principles for Businesses.

Between July 2005 and June 2009 Sesame advised 426 customers to invest a total of over £6.1million in Keydata life settlement products. Sesame failed to take reasonable care to ensure the advice given by ARs was suitable. The FCA found that Sesame failed to explain to customers all of the key risks and failed to give a balanced view of the advantages and disadvantages of the life settlement products. In addition, between July 2010 and September 2012, Sesame failed to take reasonable care to organise and control its affairs responsibly and effectively and had failed to improve its oversight of the ARs. These systems and controls failings meant that the unsuitable sales that occurred between 2005 and 2009 could have been repeated between July 2010 and September 2012 for other investment products.

Copies of

Sesame’s final notice = http://www.fca.org.uk/static/documents/final-notices/sesame-limited.pdf
FCA press release = http://www.fca.org.uk/news/fca-fines-sesame

ines investment firm £6 million for giving unsuitable advice to customers and for inadequate systems and controls