LONDON (Reuters) - The Financial Services Authority fined mutually owned savings and loans company Norwich & Peterborough 1.4 million pounds for poor client advice on products sold by the failed Keydata company.
The FSA said in a statement on Monday the fine related to the failure of Norwich & Peterborough to “give its customers suitable advice in relation to the sale of Keydata products”.
Norwich & Peterborough also agreed to set aside some 51 million pounds to pay out to customers in relation to the affair.
Keydata, which sold bonds packaged in Luxembourg based on complex and opaque U.S. second-hand life insurance policies to thousands of mainly retired people in Britain, was shut down by the Financial Services Authority in 2009.
The FSA is investigating Keydata’s product design and marketing and its multimillionaire founder, Stewart Ford, for possible misconduct in Britain’s biggest personal investment scandal for 20 years.
During a period of over three years, Norwich & Peterborough advised 3,200 clients to invest in Keydata’s life settlement products.
However, the company failed to properly assess the financial circumstances of many of its customers, designating them as having a higher tolerance of risk than was appropriate, the FSA said.
Last year Ford urged the British government to launch an independent inquiry into the collapse of the company.
Reporting by Sudip Kar-Gupta; Editing by Rhys Jones and David Holmes
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