Broker closes office after pounds 10,000 fine

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The Independent Online
Pilling & Co, a private client stockbroker, is closing its London office after being fined pounds 10,000 by the Securities and Futures Authority for "reckless trading" by one of its brokers.

"This unfortunate affair was a factor in our decision to close the London branch on 1 November and to bring all of the firm's activities under the control of our Manchester head office," said Dennis Morgan, senior partner of Pilling, which was also ordered to pay pounds 8,000 towards the SFA's costs.

The SFA, whose chairman is Nick Durlacher, said it had expelled Norman Mauroo, who was based in Pilling's London office, from its register of representatives and ordered him to pay pounds 6,000 towards costs.

"The SFA considers that Mr Mauroo, in his conduct in relation to private customers of Pilling & Co, failed to observe high standards of integrity and fair dealing," the SFA said.

The regulator said Mr Mauroo failed to act with due skill, care and diligence, failed to give customers adequate information to enable them to make balanced and informed decisions about their investments andcontravened rules relating to suitability, record keeping and the provision of risk warnings.

Mr Mauroo was employed by Pilling in London between May 1993 and October 1994 and during that time, according to the SFA, gave investment advice and made recommendations to private customers of the firm which were unsuitable for them.

He failed to obtain or keep adequate records of customers' financial circumstances and investment objectives and advised customers to buy securities without himself having adequate knowledge of the relevant company, the SFA said.

Mr Mauroo also ignored specific instructions given to him by one customer. He obtained a cheque to buy shares for a customer, but put the money in a debit balance in his personal dealing account at the firm.

"His trading on behalf of customers amounted to recklessness," the SFA said. Three customers are understood to have been affected by his dealings.

Mr Morgan said Mr Mauroo had his own clients and "was not allowed near the firm's established customers". He added: "Mr Mauroo was recruited solely by the London branch of Pilling & Co and had no connection with our Manchester head office."

The SFA said Pilling admitted that for the period between May 1993 and October 1994 its branch office in London failed to organise and control its internal affairs in a responsible manner by keeping proper records and having adequate arrangements to ensure its staff were adequately trained, in breach of a Securities and Investments Board rule.

"In addition the firm has admitted responsibility for Mr Mauroo's actions in failing to ensure that it did not make unsuitable personal recommendations to private customers and by failing to keep adequate records relating to private customers of the firm," the SFA said.