Twenty-three fund management companies face disciplinary action by their financial watchdog in a fresh blitz over the mis-selling of personal pensions.
If charges are proved against the firms, understood to include some of the City's biggest names, they may face unlimited fines. Individuals within those companies could be permanently barred from doing investment business.
The investigation into the 23 firms' activities, said to have shown "systemic failings" in their sales processes, was launched 15 months ago by their watchdog, the Investment Management Regulatory Organisation. The first fines are expected within weeks.
Imro's inquiry into the financial services offshoots of some of its fund managers is the toughest so far carried out by any regulator.
It follows accusations by the Labour Party and the Consumers' Association that financial watchdogs have dragged their feet in resolving the issue.
Phillip Thorpe, chief executive of Imro, said: "Formal investigations have only been launched where it appears that there have been systemic failings in the sales process.
"It is our declared intention that our regulated firms will complete the whole review ahead of the final deadline."
The Imro inquiry follows a report in October 1994 by the leading regulator, the Securities and Investments Board, which found that up to 1.5 million people may have been mis-sold a private pension.
Every regulator was told to begin a review of pension transfers carried out by their members. But at the largest watchdog, the Personal Investment Authority, the process stalled within months, mired in legal action and a boycott by thousands of financial advisers.
Earlier this week, the SIB's progress report admitted that few of the urgent cases due for redress by the end of last year had received any compensation.
Imro's investigation revealed that of its 1,200 members, 46 carried out a total of 76,000 pension transfers. Of those, 15,000 were priority cases where policyholders have died, are close to retirement or were over the age of 35 when they opted out of company schemes. Compensation averaging pounds 3,000 per affected client has been paid.
Of the 46 firms that carried out pension transfers, 16 joined the PIA last year. But they remain subject to Imro in respect of activities while members. It was not clear yesterday how many of the new PIA members are under investigation.Reuse content