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FSA fines partners who did not know investments were risky

20 January 2011
Written by rosalind renshaw

The FSA has fined and banned the two partners of investment firm Clark Rees for failing to ensure the firm made suitable recommendations to its customers.

Paul Clark was fined £10,500 and Ceri Rees was fined £17,500. They have been banned from performing senior roles and also from selling similar investments for two years.

Both sold unregulated collective investment schemes (UCIS), which are regarded as risky investments which cannot be promoted to anyone but sophisticated or high net worth investors.

However, neither partner was aware of these restrictions.

In one case a customer who was near to retirement invested 60% of his portfolio and another retired customer invested 55% of his retirement lump sump.

Both Clark and Rees agreed to settle at an early stage of the investigation and qualified for a 30% discount. Without the reduction, the fines would have been £15,000 for Clark and £25,000 for Rees.

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