Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

FSA fines Gracechurch boss after clients lose £2m on small-caps

FSA fines Gracechurch boss after clients lose £2m on small-caps

The Financial Services Authority (FSA) has handed a £450,000 fine to the chief of Gracechurch Investments after it pressured clients in to investing in small cap stocks.

Clients made losses of at least £2 million and the FSA said the fine would have been as much as £1.5 million if Gracechurch had not already been in liquidation.

Sam Thomas Kenny was formerly chief executive of Gracechurch, and the FSA said he ‘personally pressurised’ and encouraged staff to pressure clients into investing in ‘risky’ AIM or unlisted companies.

Kenny and his staff misrepresented the small cap stocks’ performance and ignored clients protestations that they had no further cash to invest.

‘Gracechurch’s brokers used pressure sales tactics to coerce its clients to invest in risky small company stocks which were listed on AIM and PLUS or not listed at all,’ the regulator said.

‘The firm misrepresented, for instance, the financial performance of stocks both orally and in writing. Brokers ignored requests for further information and protests that clients had no funds to invest.  In at least one case a broker claimed that the recommendation was based on inside information.’

Alongside the £450,000 fine Kenny has been banned from holding a job in financial services.

He has referred the matter on to the Upper Tribunal.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge: the opportunities in UK challenger banks

Brewin's Gutteridge: the opportunities in UK challenger banks

In this week's podcast, Brewin Dolphin's Ben Gutteridge and Guy Foster, discuss opportunities in the global financials sector with Aptus' Johnny De La Hey.

Play Charles Tan on Woodford & hidden trust income gems

Charles Tan on Woodford & hidden trust income gems

Cantor Fitzgerald investment company analyst Charles Tan discusses Woodford Patient Capital and some of the income trusts slipping under the radar.  

Brewin's Foster: the world’s most unconventional monetary policies

Brewin's Foster: the world’s most unconventional monetary policies

In this week's podcast, Guy Foster asks why the world’s biggest economies are pursuing some of the world’s most unconventional monetary policies. 

Your Business: Cover Star Club

Profile: how Close Brothers gave power back to the regions

Profile: how Close Brothers gave power back to the regions

Almost a year into the role, Close Brothers Asset Management head of wealth management Andy Cumming has highlighted three keys areas of focus

Wealth Manager on Twitter