London stockbroker Wills & Co has been stripped of its regulartory permissions to provide investment advice and must now contact all customers to confirm this change.

In October 2007, the Financial Services Authority (FSA) fined Wills & Co £49,000 for giving poor risk warnings and misleading information to its high-risk penny share customers.

It was also required to correct its sales and compliance practices which fell below FSA standards. Now, the company has escaped a subsequent £1.5 million fine as the business has begun the process of winding down due to the large amount of customer redress due.

The FSA has issued statements of misconduct against Darren Lansdown, Wills & Co’s sales director, and Katharine Prichard, its compliance director for failing to ensure that Wills & Co’s business was run in compliance with regulatory requirements. 

The regulator said that they did not ensure changes to Wills & Co’s compliance monitoring and sales practices were sufficient to correct the failings identified by the FSA.

Both directors have signed undertakings not to hold senior management functions in the financial services industry for three and five years respectively.

Margaret Cole, director of enforcement at the FSA, said that it is astonishing that the stockbroker failed to put its customers’ interests first after the previous fine.

She added, ‘The FSA has made no secret of the fact that it expects higher standards of customer treatment in the stockbroking sector.

'What makes this case particularly serious is that the firm was fined by the FSA and promised the FSA that its treatment of customers had improved when that was plainly not the case. This is unacceptable and justifies the action we have taken against the firm and its directors.’