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Tribunal Upholds UK Regulator's Fine On Scottish Wealth Firm
Austin Freitas
29 November 2013
The Upper Tribunal has upheld the decision
of the Financial Conduct Authority, the UK regulator, to fine Scottish firm
Westwood Independent Financial Planners £100,000 ($161,000) for communications
and suitability failings in relation to geared traded endowment policies
(GTEPs), according to an FCA statement. The
Tribunal agreed with the FCA that Westwood breached two of its principles for
businesses and a range of FCA rules in relation to its sale of GTEPs. Often,
Westwood would advise investors to remortgage their home to invest in
GTEPs. It
was found that Westwood had not taken reasonable care to ensure its
recommendations to customers to invest in a GTEP plan were suitable, having
regard to what it knew about those customers. Particularly, for all but one of
the customer witnesses, Westwood had not provided information in a clear and
fair way. The
action is an example of how the FCA is seeking to crack down on the sale and marketing
of financial products it seems unsuitable for certain types of investor. “ weighted towards the positive with
insufficient emphasis and inadequate explanation of the risks so that, although
it was not misleading, it was not clear and fair,” the Tribunal said. Westwood
no longer carries on any regulated activities, having been placed into
sequestration (a Scottish term for bankruptcy) in October of 2011. To register for Compliance Matters, a new publication launched by the publisher of this website, click here.