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FSA fines and bans stock broker boss

The chief executive of Gracechurch Investments has been fined £450,000 and banned along with the firm's compliance officer.

 
FSA fines and bans stock broker boss

The City regulator has fined the boss of a shares 'boiler room' £450,000 after censuring his firm Gracechurch Investments for pressuring investors into buying risky shares that lost them £2 million.

The Financial Services Authority (FSA) has fined Sam Thomas Kenny, who was chief executive of Gracechurch and banned him from holding a position in the financial services industry.

Kenny has referred the FSA decision to fine and ban him to the Upper Tribunal where the FSA will present its case that Kenny personally pressured or misrepresented material facts to clients and trained and encourage staff to pressure consumers.

Gracechurch compliance officer Carl Peter Davey has also been banned form working in financial services for deliberately with-holding details of non-compliant sales calls from the FSA. He would have been handed a fine of £175,000 but escaped it due to the ‘serious financial hardship’ it would cause him.

Gracechurch has also been censured by the regulator for high pressure-selling tactics that pushed customers to invest in the shares of small companies that were listed on the AIM and Plus exchanges or were not even listed at all.

The staff at Gracechurch were found to have misrepresented the financial performance of stocks both over the phone and in writing to investors. Its brokers also ignored requests for further information from investors and protests from victims that they did not have the money to invest.

On one occasion one broker said an investment should be made based on inside information.

The FSA said it would have fined Gracechurch £1.5 million but could not as the company was in liquidation.

Tracey McDermott, director of enforcement and financial crime at the FSA, said: ‘High pressure sales tactic and systematic misrepresentation to clients are wholly unacceptable practices. The FSA will not tolerate firms coercing clients into buying financial products or services that aren’t suitable for them.'

3 comments so far. Why not have your say?

peter montgomery

Dec 20, 2012 at 14:57

Jail them;its a total joke not fine someone 'due to financial hardship'! Does that also apply to the payment of tax.?

Its no wonder the FSA is an object of derision and Ms Mc Dermott doesn't strike one as being of sufficient weight to be at the sharp edge of this,impotent,organisation.Making 'strap lines' for press releases,possibly,not as the public face please.

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Anonymous 1 needed this 'off the record'

Dec 20, 2012 at 15:21

I know someone who is doing 6 months at the moment for evading tax he pleaded guilty and he has repaid HMRC the full amount, I am not condoning tax evasion, far from it, yet if you defraud the public not only do you not get prosecuted and go to jail, but you do not get fined because of financial hardship -seize their assets and hound them like HMRC do for everything they can.

By the way he is a builder.

One law for frauding the government and another for frauding the public, pretty similar to everything else in this country, if we really want to deter fraudster whether they be bankers, politicians fiddling expenses or financial advisors lining their pockets, all of them doing it at our expense you are going to have to treat them like the working class and jail them.

I used to be a conservative voter and believe in free enterprise but inceasingly I am becoming disillusioned with this country and its legal system that seems strangely skewed in favour of the rich and upper class.

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paul kaye

Dec 20, 2012 at 16:23

Look its them and us,while millionairs run things,you have no chance,anyone that thinks the public are being safeguarded is living in cookoo land.Criminals are far too clever for bankers and the government and perhaps could do a better job of running the country! then we could work out how to take all the money away from the rich who never made it in an honest way anyway!!!!!!!!!!!

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