SFA clamps down on futures broker

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The Independent Online
THE Securities and Futures Authority, the City watchdog, yesterday severely restricted the business that the London-based futures and options broker David Coakley Ltd can carry out, after a number of complaints from private clients.

The SFA issued a statement saying: 'The firm has been trading in futures and options for private clients on an advisory basis and has repeatedly failed to ensure that investments undertaken on behalf of those clients were appropriate for them and has placed the interests of the firm above the interests of the clients.'

David Coakley has more than 400 clients, nearly 200 of which are private. The SFA started investigating complaints from private clients in April. These tended to be small customers with investments of a few thousand pounds rather than the wealthy individuals that usually buy futures and options. Many were attracted by newspaper advertisements.

The firm's proprietor, David Coakley, founded the operation in 1986. It now employs 25 salesmen in its offices at Manchester Mews, London W1. A spokesman for the firm last night said: 'No comment.'

The SFA issued an intervention order under the Financial Services Act 10 days ago, which David Coakley appealed against, and a modified order was issued last Friday. The order forbids the firm to carry on any kind of investment business other than execution- only deals for non-private clients or transactions necessary to close other client positions.

The firm is also allowed to carry out business for clients whose investments are managed by a licensed commodity trading adviser, including the Spanish CTA Leonard Berney.

The firm must transfer all positions and assets belonging to other clients to brokers within 14 days, or return the assets and close those clients' positions.

David Coakley's latest filed accounts for the year to 31 December 1991 show commissions rising from pounds 1.56m to pounds 1.63m, while pre- tax profit fell from pounds 163,409 to a loss of pounds 15,439.

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