FSA has also stopped Wills & Co from giving investment advice and it is required to write to all its customers to confirm this change. Wills & Co would have been fined GBP1.5m had it not been in the process of winding down its business and had a large amount of customer redress due.
FSA has also issued statements of misconduct against Darren Lansdown, Wills & Co’s sales director, and Katharine Prichard, its compliance director for failing to ensure that Wills & Co’s business was run in compliance with regulatory requirements. Both directors have signed undertakings not to hold senior management functions in the financial services industry for 3 and 5 years respectively.
Reportedly, in October 2007, FSA fined Wills & Co GBP49,000 for giving poor risk warnings and misleading information to its high risk penny share customers. It was also required to correct the failings identified with its sales and compliance practices. Two months later, Wills & Co told the FSA that the necessary changes had been made.
However, when FSA conducted a visit to Wills & Co, it found the same failings. As a result, FSA undertook a review of transactions and identified failings in all transactions and the risk that the customers may have been given unsuitable advice.
In order to protect consumers, FSA required Wills & Co to engage an external consultant to retrain and monitor its advisers and then stopped it providing investment advice.
Margaret Cole, director of enforcement at FSA, 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.”
