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FSA/PN/018/2009
28 January 2009

The Financial Services Authority (FSA) has banned the former chief executive of stockbroking firm Pacific Continental Securities UK Limited (PCS), Mr Steven Griggs, and its former finance director, Mr Charles Weston, and also fined them £80,000 and £95,000 respectively for serious failures in the company which led to customers buying high risk shares without suitable advice.

On 28 January 2009, PCS was declared in default by the Financial Services Compensation Scheme (FSCS). Customers of PCS, which is currently in liquidation, should contact the FSCS to start the process of claiming compensation if they were mis-sold shares.

The FSA found that between 1 April 2005 and 20 June 2007, Mr Griggs and Mr Weston had acted without integrity, and had failed to ensure that customers were treated fairly or that PCS was properly run.

In particular, Mr Griggs failed to ensure that:

• advisers did not use high pressure sales tactics in selling shares to customers;
• advisers did not exceed the trading limits on customers' accounts;
• the claims made by PCS about its research into the high risk shares it recommended were honest and realistic; and
• there were adequate compliance monitoring and training arrangements at the firm.

Mr Weston's failings were considered serious because he:

• was aware that PCS used high pressure sales tactics and knowingly allowed advisers to continue doing so;
• knew that advisers were recommending shares to benefit PCS, not their customers;
• failed to ensure customers' complaints were suitably handled; and
• did not ensure the firm and its advisers were complying with their regulatory requirements.

Mr Griggs and Mr Weston also misled the FSA about the true nature of their relationship with an individual linked to share fraud scams (also known as boiler room fraud).

Margaret Cole, director of enforcement at the FSA, said:

"PCS treated its customers appallingly and Mr Griggs and Mr Weston must be held responsible for putting innocent customers at risk. It is especially worrying that no action was taken by PCS or its directors to stop customers from being misled or given unsuitable advice when buying shares, thereby depriving them of their savings. Both directors also failed to ensure that the business was effectively managed. This kind of behaviour damages the reputation of the financial services industry and reduces consumer confidence in dealing with regulated firms.

"Other stockbrokers and non-authorised companies who operate in a similar way should take this as a warning that we will take any action necessary to remove them from the industry and to protect customers."

Mr Griggs is banned from carrying out any significant influence functions while Mr Weston is banned from carrying out any regulated activities. The FSA has also censured the firm, Pacific Continental Securities for misleading customers and allowing its advisers to use inappropriate sales practices when giving advice on high risk shares. PCS would have received a fine of £2 million, if it was not in liquidation.

Notes for editors

1. Final notices for Mr Griggs, Mr Weston and Pacific Continental.
2. Customers of Pacific Continental who might have been mis-sold shares should contact the Financial Services Compensation Scheme on 020 7892 7300 to start the process of claiming compensation.
3. Mr Griggs's fine and prohibition from carrying out significant influence functions was determined by the Regulatory Decisions Committee (RDC). Disciplinary decisions are referred to the RDC when an individual or firm disputes the findings of the FSA's enforcement division. Mr Weston's fine and prohibition was determined under the FSA's executive settlement procedures.
4. The Regulatory Decisions Committee was set up by the FSA board in November 2001. The RDC has 11 members who are all appointed by, and responsible to, the Board. All members are either current or recently retired practitioners, who all represent the public interest. Full biographies of all the RDC members and details of how the committee works can be found on the FSA website.
5. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
6. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.