FSA censures stockbroking firm for persistent compliance failures – On 17 February 2010, the FSA published the Final Notice it has issued to Wills & Co Stockbrokers Limited (“Wills & Co”), imposing a public censure for serious regulatory failings in breach of Principles 2, 3, 6, 7, 9 and 11 of the FSA’s Principles for Businesses. The FSA has indicated that it would have fined Wills & Co £1.5 million if it was not for the fact that Wills & Co is winding down and has a substantial amount in customer redress outstanding.
At the same time, the FSA published Final Notices issued to:
- Darren Lansdown, Wills & Co’s sales director, who has undertaken not to hold any significant influence functions for 3 years.
- Katharine Prichard, Wills & Co’s compliance director, who has undertaken not to hold any significant influence functions for 5 years.
On 31 October 2007, the FSA fined Wills & Co £49,000 for failures relating to its small cap securities business and required it to give undertakings for remedial action.
Following a visit in May 2008, the FSA became concerned that Wills & Co had not complied with the undertakings. A subsequent FSA investigation found that, on the basis of 19 advisory trades between 17 January 2009 and 17 March 2009, Wills & Co continued to demonstrate failures which were the same or similar to those for which it was disciplined in October 2007.
The FSA found that Wills & Co’s failures included:
- A failure to implement improvements to its systems and controls and sales practices required by the October 2007 Final Notice.
- Serious weaknesses in management systems and controls, posing a significant risk to consumer protection.
- Poor sales practices and compliance monitoring, posing the risk that customers were recommended securities unsuitable for them.
- A failure to handle customer complaints appropriately, including poor cooperation with the Financial Ombudsman Service (FOS).
- A failure to establish and implement adequate monitoring processes to ensure compliance with the FSA Rules.
On 1 December 2009, the FSA imposed an own initiative variation of permission (OIVoP) on Wills & Co to prevent it from advising retail clients on purchasing securities. The OIVoP came into effect on 29 January 2010, after Wills & Co had agreed to withdraw a reference to the Financial Services and Markets Tribunal.
Commenting on this Final Notice, Margaret Cole, FSA Director of Enforcement and Financial Crime, said: “It is shocking that despite previous action, Wills & Co still failed to put its customers’ interests first. The FSA has made no secret of the fact that it expects higher standards of customer treatment in the stockbroking sector. What makes this case particularly serious is that the firm was fined by the FSA and promised the FSA that its treatment of customers had improved when that was plainly not the case. This is unacceptable and justifies the action we have taken against the firm and its directors.”
read more
http://www.fsa.gov.uk/pubs/final/wills_stckb.pdf
http://www.fsa.gov.uk/pubs/final/wills_stckb_2nd.pdf
http://www.fsa.gov.uk/pages/Library/Communication/PR/2010/029.shtml
Loading...