Cantor to appeal FSA fine for misconduct

The Financial Services Authority (FSA) has fined Cantor Index Limited 70,000 for running a misleading campaign promoting spread betting. The company’s senior management failed to ensure there were adequate systems and controls in place to ensure that its financial promotions were systematically monitored.

This failure resulted in the misleading advertising campaign entitled ‘Free Xda’ for Cantor Mobile, the firm’s new spread betting device. The promotional material, which included flyers handed out at London stations, posters and advertisements on television and in the popular press, did not contain adequate warnings about the risks of spread betting and consequently put a large number of potential customers at risk.

In fixing the amount of penalty the FSA has recognised that no customer of Cantor Index suffered any loss as a result of these failings and the potential impact of these failings was mitigated by the remedial action since undertaken by Cantor Index.

Cantor index, the spread betting firm, has been fined by the Financial Services Authority (FSA) for alleged misconduct, and is appealing the case to the Financial Services & Markets Tribunal.

The appeal, which is unlikely to be heard until next year, follows a meeting of the FSA’s Regulatory Decisions Committee last month, where Cantor failed to persuade FSA enforcement officials to reverse the decision.

The FSA would not comment on the size of the fine, or the reason for the disciplinary action, but confirmed that Cantor is appealing against an enforcement decision. Cantor Index, and its parent company, Cantor Fitzgerald, declined to comment.

After exponentially increasing the number of fines and individual bans this year, the regulator has seen a huge increase in appeals waiting to be heard at the Tribunal.

More than 25 appeal cases against the FSA are waiting to be heard, of which only a handful have yet been allocated a date.

Among the companies involved in recent appeal cases is Legal & General, which is waiting to hear if it has been successful in overturning a £1.1m fine for alleged endowment mis-selling.

In total, the FSA has successfully collected more than £20m in fines from more than 20 companies over the past year.

Cantor is no stranger to legal clashes, having already fought two battles in the courts against former employees this year .

This entry was posted on Saturday, November 13th, 2004 at 10:48 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.