The Financial Services Authority (FSA) has for the first time both fined and banned a stockbroker after he was found to have dishonestly sold high-risk shares to customers.
The financial watchdog fined the former Square Mile Securities trader Mohammed Suba Miah £21,000 as well as banning him from working as a broker.
The FSA said that the trader had sold high-risk shares without customers’ consent and deliberately misled them by not explaining the risks involved with such shares.
Mr Miah’s actions were “considered particularly serious because they lacked integrity and exposed customers to significant risk of financial loss”, the FSA said.
He was spared a fine of £30,000 because he had accepted the FSA’s findings and co-operated with its investigation.
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Square Mile, which specialises in derivatives trading and small-cap securities, was itself fined £250,000 last month for persistently using high-pressure sales tactics and giving misleading information to customers.
The FSA highlighted one particular example where Mr Miah, who worked at Square Mile for four years, had attempted to convince an eldery customer that he had purchased shares when the customer had not authorised the transaction.
Margaret Cole, the regulator’s director of enforcement, said that Mr Miah had abused his position of trust.
“Customers have a right to expect their brokers to give clear and fair advice, recommend suitable shares and to treat them fairly,” Ms Cole said.
“Stockbrokers are on notice that the FSA will not tolerate abuse of this trust, and our actions against Mr Miah show that we take this very seriously.”