The fine relates to specific breaches of FSA rules and principles in relation to the firm's:
- failure to put in place appropriate procedures to confirm compliance of financial promotions, and the subsequent issuing of one financial promotion without confirmation of compliance;
- confirmation of the compliance of and the communication of misleading financial promotions;
- failure to put in place appropriate systems and controls for managing conflicts of interest; and
- failure to have appropriate arrangements in place to ensure that staff received training and maintained their competence.
Anna Bradley, Director of the FSA's Retail Themes Division, said:
"Firms must not cherry-pick the information that they include in their marketing material. They must present a balanced picture so that potential customers can see the key risks of an investment, as set against benefits.
"The provision of clear and unambiguous financial promotions is a key priority for the FSA. All firms, whether large or small, need to ensure they have appropriate systems and controls in place to meet FSA regulations."
The defects were identified by the FSA's Financial Promotions and Monitoring Team. The Bear Market promotion and another advertisement were published in financial periodicals, and direct offer promotions were emailed to 198,000 subscribers to the website of the parent company, Hemscott plc.
Anna Bradley said:
"Financial promotion is a priority area for the FSA. Anyone who sees financial advertisements they think are misleading should report them to the FSA either through the website or on the hotline on 0845 730 0168."
Background
- The full text of the Final Notice issued by the FSA includes the background to the case, the relevant statutory provisions, regulatory requirements contravened and the factors taken into account by the RDC when setting the level of the fine.
- Financial penalties are not treated as income by the FSA. They are applied for the benefit of authorised persons (or the issuers of securities admitted to the official list) as appropriate, and so given back to the industry in subsequent years.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.