Hythe fined by FSA for risky sales culture

THE FINANCIAL Services Authority yesterday slammed stockbroker Hythe Securities with £235,000 worth of fines, as the regulator’s crackdown on illegal practices continues to rage through the City.

The lion’s share of the fine – £200,000 – will be paid by the firm itself, whose systems and controls were inadequate to protect customers against poor advice, the FSA said.

Its senior director Meenaz Mehta has also been rapped with a £35,000 personal fine for failing to implement formal reporting procedures. He has been banned from holding senior positions in retail stockbroking firms peddling penny shares to the public, the FSA added.

Margaret Cole, the regulator’s director of enforcement, said: “Mehta’s lack of action and leadership allowed Hythe to place the pursuit of profit above the protection of its customers. This is totally unacceptable.”

Hythe stands accused of having employed poorly trained advisers, paid them largely by commission and pressured them to meet sales targets or face disciplinary action – an aggressive sales culture generating risk which the firm’s systems and controls were too weak to manage.