FSA?doles out more fines in Lehman saga
THE FINANCIAL Services Authority (FSA) has imposed three more fines relating to Lehman Brothers-backed mortgage products, the watchdog sa
id yesterday.
Legal outfit Thorntons Law was fined £35,000 for misleading customers about the risks of mortgage-backed securities. Michael Royden, a partner at the Dundee-based firm, was separately fined £10,500.
The FSA said the company had told clients there was “absolutely no risk to capital” and recommended they pour a large amount of money into mortgage-backed products.
Royden was responsible for compliance at Thorntons, despite having no financial services experience. The FSA said he failed to read up on the Lehman-backed products, and delegated day-to-day compliance work to another junior member of staff.
The FSA also handed down a £28,000 fine to Robert Yarr, a financial adviser at a financial advice firm, McClelland Yarr in Belfast.
Yarr did not understand or research the Lehman products and failed to keep records of his work, the FSA said. All three parties fully complied with the FSA probe into their actions between November 2007 and August 2008, and received a 30 per cent discount for settling at an early stage.
The FSA has already fined several firms and individuals for giving misleading investment advice, following its review into the marketing and distribution of Lehman-backed products in October 2009.
The watchdog fined RSM Tenon Financial Services £700,000 in March for failings in its advice and sales processes relating to Lehman-backed structured products.
Tenon was also directed to compensate customers who were mis-sold those products, estimated to total around £1.8m. The FSA has estimated that 6,000 investors were caught up in Lehman-backed products when the bank folded in 2008.