RSM Tenon fined £700,000 for bad investment advice
REGIONAL accountancy firm RSM Tenon has been fined £700,000 by the Financial Services Authority (FSA) for “significant failings” in the way it sold investment products backed by Lehman Brothers, the failed investment bank.
The regulator said that from November 2007 to August 2008 the AIM-listed firm had failed to fully assess the risks of structured products and make them clear to customers.
It also failed to provide suitable advice to its customers and did not have effective risk management systems in place.
Tenon, the UK’s seventh biggest accountancy firm, would have faced a fine of £1m but this was reduced because of the way it co-operated with the FSA.
It must now conduct a review of all its sales of Lehman-backed structured products. Customers that received unsuitable advice will be able to sell their product to Tenon and have the money they invested reimbursed plus interest.
Margaret Cole, FSA director of enforcement and financial crime, said: “Firms giving investment advice must ensure they fully assess clients’ needs and make suitable recommendations – they must also have the necessary systems and controls in place to demonstrate this. We take failure in this area very seriously and the fine and other actions announced today demonstrate our commitment to credible deterrence.
“This is the first action we have taken for advice failings relating to Lehman-backed structured products following our recent review, and we acted swiftly and decisively in order to return money to investors as quickly as possible. We will continue to take tough action where we find evidence that firms are giving unsuitable advice to investors.”
RSM Tenon was formed in December from the £76m merger of Tenon and RSM Bentley Jennison. It has offices in Manchester, Bolton, Chorley, Preston and Rochdale.
