Staff face fines for bad financial advice
Tuesday 16 May 1995
Up to 16,000 fund managers and senior investment company staff face the prospect of heavy fines levied on them personally if they give bad advice or breach rules set by their regulator.
The Investment Management Regulatory Organisation, the fund managers' watchdog, said yesterday that the first individual fines could be imposed by the late summer.
Imro has more than 80 cases under investigation, many started since last August when individual members were first entered on a register alongside their companies. This was partly to enable Imro to punish individuals rather than their firms.
Phillip Thorpe, Imro's chief executive, said: "It takes about five months for a case to be investigated by Imro at present. It is now possible for a case to result in a fine on individuals if they are found guilty of a regulatory offence." He stressed that no individual had yet been singled out for a fine.
Imro follows the Securities and Futures Authority, which regulates the City's investment markets and has the power to levy fines on individuals.
By contrast, the Personal Investment Authority, the financial services regulator, fines the companies. The Securities and Investments Board, the top watchdog, only names the wrongdoers, although it can ban individuals from practising.
Imro's tough stance follows publication of plans aimed at tightening investor protection. It intends to place some of its members in a higher risk category and increase the frequency of its monitoring visits.
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