Hemscott fined £50,000 by FSA

The Financial Services Authority handed out its first fine of the new year yesterday, landing the financial website Hemscott with a £50,000 penalty for a misleading advertisement with the slogan "We even make a bear market all soft and cuddly".

The Financial Services Authority handed out its first fine of the new year yesterday, landing the financial website Hemscott with a £50,000 penalty for a misleading advertisement with the slogan "We even make a bear market all soft and cuddly".

The campaign, which ran in the summer of 2003 and advertised Hemscott's share-tipping service, was criticised for highlighting only its most successful share recommendations, rather than a cross-section.

The FSA also criticised the group's compliance procedures and its failure to mention that past performance is not necessarily a guide to future returns.

The investigation also uncovered two instances where members of Hemscott's share-tipping team had carried out personal transactions in shares they had recommended, without making the necessary declarations.

Anna Bradley, the director of the FSA's retail themes division, said: "Firms must not cherry-pick the information they include in their marketing material. They must present a balanced picture so that potential customers can see the key risks of an investment, as set against benefits.The provision of clear and unambiguous financial promotions is a key priority for the FSA."

The ads were published in two financial magazines with circulations of about 50,000. The campaign was also e-mailed to about 200,000 people.

Hemscott, which is chaired by the BBC's chairman, Michael Grade, said yesterday it had taken steps to remedy the problems highlighted by the FSA. Its statement said: "Hemscott takes very seriously the areas of compliance and financial promotion. Whilst we accept that we were in technical breach of the FSA's code, the financial promotions in question were published in 2003. Subsequently our internal procedures have been improved and strengthened to ensure that such a situation cannot reoccur. Hemscott is pleased to note that as far as it is aware, no customer suffered any loss or complained about the matters raised."

The FSA said it wants to encourage more people to report what they believe are misleading ads, by calling 0845 730 0168.