Pacific Continental directors banned
Two directors at notorious stockbroker Pacific Continental Securities (PCS) have been fined and banned from top level roles in the financial services industry by the FSA.
Steven Griggs, the former chief executive of the group, and former finance director, Charles Weston, were fined £80,000 and £95,000 respectively for serious failures in the company which led to customers buying high risk shares without suitable advice.
The FSA found that Griggs and Weston acted "without integrity" and failed to ensure that customers were treated fairly or that PCS was properly run between 1 April 2005 and 20 June 2007.
This included the use of high pressure sales tactics, exceeding trading limits on customer accounts and a lack of adequate compliance monitoring and training arrangements at the firm.
Up to 4,500 private investors lost as much as £70 million between them after buying dodgy shares in PCS. The stockbroker went bust in 2007.
Margaret Cole, director of enforcement at the FSA, says: “PCS treated its customers appallingly and Griggs and Weston must be held responsible for putting innocent customers at risk.
“It is especially worrying that no action was taken by PCS or its directors to stop customers from being misled or given unsuitable advice when buying shares, thereby depriving them of their savings. Both directors also failed to ensure that the business was effectively managed.
"This kind of behaviour damages the reputation of the financial services industry and reduces consumer confidence in dealing with regulated firms."
The regulator says it's uncovered clear links between PCS and a well-known individual linked to illegal share fraud scams. Griggs and Weston misled the FSA over the nature of their relationship with 'Mr A'.
Griggs has been banned from carrying out any significant influence functions while Weston is no longer allowed to carry out any regulated activity. PCS would have received a £2 million fine if had not been declared in default by the Financial Services Compensation Scheme (FSCS) on 28 January.
Customers of PCS are advised to contact the FSCS to start the process of claiming compensation if they were mis-sold shares. Investors are covered up to a maximum of £48,000.
The Financial Services Authority is an independent non-governmental body, given a wide range of rule-making, investigatory and enforcement powers in order to meet its four statutory objectives: market confidence (maintaining confidence in the UK financial system), financial stability, consumer protection and the reduction of financial crime. The FSA receives no government funding and is funded entirely by the firms it regulates, but is accountable to the Treasury and, ultimately, parliament.
The Financial Services Compensation Scheme is the compensation fund of last resort for customers of authorised financial services firms. If a firm becomes insolvent or ceases trading, the FSCS may be able to pay compensation to its customers. Limits apply to how much compensation the FSCS is able to pay, and those limits vary between different types of financial products. However, to qualify for compensation, the firm you were dealing with must be authorised by the Financial Services Authority (FSA).