LONDON: Britain’s Financial Conduct Authority has fined Credit Suisse International and Yorkshire Building Society (YBS) for promising unrealistic returns to investors who had limited knowledge of markets.
The FCA said in a statement yesterday it has fined Credit Suisse International £2.4m and Yorkshire Building Society £1.4m, its second and third biggest fines for marketing failures related to investments totalling £797m. “These promotions were a serious breach of the requirement to be clear, fair and not misleading,” the watchdog’s director of enforcement, Tracey McDermott, said.
It was also the first time that the watchdog, launched in April 2013 with a specific remit to protect consumers after a string of mis-selling scandals spanning decades, has fined the producer and distributor of a product at the same time.
Credit Suisse was telling customers that its Cliquet deposit product provided capital protection and a guaranteed minimum return, with the apparent potential for significantly more if Britain’s FTSE 100 share index performed consistently well.
Almost 83,800 customers invested a total of £797.4m in the product, with Yorkshire Building Society being distributor
responsible for approximately 75 percent of the total amount invested. The FCA said the probability of achieving only the minimum return was 40-50 percent, and the probability of achieving the maximum return was close to zero percent. Reuters
