A firm of UK solicitors found guilty of promoting overseas 'boiler rooms' in exchange for commissions has had its fine sextupled by the Court of Appeal.
Fox Hayes will be fined more than £950,000 after the FSA won an appeal against the Leeds-based firm. The initial fine was less than £150,000.
The appeal victory overturns a ruling by the Financial Services and Markets Tribunal and concerns more than 30 promotions used by Fox Hayes for unauthorised and unregulated overseas companies between 2003 and 2004. The FSA says the 'boiler rooms' illegally sold shares worth about $21m to 670 UK investors.
"This decision supports our view that firms that assist boiler room operators should be brought to task for their role in perpetrating boiler room fraud and share scams," FSA director of enforcement Margaret Cole says.
"We hope this will send a strong message of deterrence to other firms and individuals that may turn a blind eye to the legitimacy of their clients in exchange for fees or commission."
In his judgement, Lord Justice Longmore said: "In my view, the misconduct which this case revealed was serious. There was a failure to take reasonable steps to ensure the promotions by the overseas companies were clear and not misleading.
"There was also serious doubt that the overseas companies would deal with UK investors in an honest and reliable way."IFAonline
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