A £400,000 FSA fine and lifetime ban for a company involved in a "blindingly obvious" boiler room scam has been upheld by a tribunal.
The Financial Services and Markets Tribunal upheld an FSA decision to permanently ban Andrew Greystoke from working in any capacity in financial services, and fine the company where he was a senior partner, Atlantic Law, a total of £400,000.
Greystoke recklessly signed off Atlantic Law's approval of 50 UK investment advertisements, between December 2005 and March 2007, issued by four unregulated Spanish stockbroking firms, the FSA found.
He failed to ensure the advertisements were clear, fair and not misleading, despite doubting the Spanish firms would deal with UK consumers in an honest and reliable way.
The advertisements approved by Greystoke were misleading because their true purpose, which the Tribunal found to have been "blindingly obvious" to Greystoke, was not to offer the free reports, but to sell shares, whose value he knew to be at least doubtful.
Free research reports on respectable listed companies were offered in the adverts.
UK consumers who requested the reports were subject to pressurised selling of high-risk illiquid shares in unlisted small companies. UK consumers who complained to the Spanish companies were subjected to threats and blackmail.
A total of 130 UK consumers who invested more than £3m in the bogus schemes have complained to the FSA.
The FSA believes they will have lost much, if not all, of their investment and that many victims will not have complained with the result that, as the tribunal found, the true loss caused by the advertisements approved by Greystoke was likely to be substantially more than £3m.
Greystoke accepted before the tribunal the Spanish firms were boiler room share scam operators, and he had approved their advertisements despite seeing consumer complaints and press articles warning of their activities.
FSA director of enforcement and financial crime, Margaret Cole, says: "Atlantic Law and Andrew Greystoke acted recklessly, without integrity and with a complete disregard of the risks to consumers."
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