Blake Independent Financial Services (BIFS) has been fined £31,500 for misleading City watchdog the Financial Services Authority (FSA).
The problem arose when the independent advice firm claimed to have financial backing in place, which it did not. Under FSA rules, BIFS needed "subordinated loans" in place so it could pay its creditors in case the firm went into receivership. BIFS claimed that it had these loans, when in fact it didn't.
"These were serious failings on the part of the firm," said Jonathan Phelan, head of retail enforcement at the FSA
"The fine sends out a clear warning to the industry that the way in which firms conduct their business and the way they interact with the FSA are as important as ensuring that individual rules are not breached," he added.
The Barnsley-based BIFS has since made sure there are enough subordinated loans in place and the company's head of compliance, and the accountancy firm from which it took advice, have been replaced.
The FSA chose to discount a fine by 30 per cent in exchange for the firm agreeing to co-operate with the investigation at an early stage.Reuse content