Stockbroker faces ban over share sale tactics

http://www.guardian.co.uk/business/2012/dec/20/gracechurch-stock-pressure-investors

Version 0 of 1.

A stockbroking firm that used high-pressure tactics to try to coerce customers into buying risky small company stocks has been censured by the Financial Services Authority and its chief executive faces a ban on working in the City.

Sam Kenny, the former chief executive of Gracechurch, is fighting a £450,000 fine from the FSA and its decision to bar him after he was found to have personally pressured clients to buy shares and encouraged his staff to do the same.

Gracechurch would have been fined £1.5m by the FSA if it had not already been in administration and the watchdog would have fined its compliance officer, Carl Davey, £175,000 if it was not for the "serious financial hardship" this would cause. Davey has been prohibited from working in the financial services industry. The FSA said he was involved in deliberately withholding the records of sales calls that it had requested.

Between April 2008 and November 2009, Gracechurch advised 340 clients to buy about £4m of stocks on Aim and Plus markets, despite protestations from some clients that they did not have enough money to invest.

"The FSA will not tolerate firms coercing clients into buying financial products or services that aren't suitable for them. Senior management of stockbroking firms should be clear that the buck will stop with them," said Tracey McDermott, director of enforcement and financial crime at the FSA.

Kenny has referred his case to the upper tribunal, which in effect hears appeals against FSA decisions and can then uphold, change or block them altogether.