Accendo markets had failed to follow adequate risk management systems, according to FSA.
The compliance officer and director of Accendo, Gregory White has also been fined GBP10,000 for his role in issue.
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FSA alleges that Accendo Markets had provided advice to customers and arranged dealings in contracts for different high risk products that expose customers to losses exceeding the original investment.
FSA further adds that the firm had failed to gather adequate client information before providing advice and also failed to keep records of customers’ trading strategies. The firm even did not have a compliance monitoring programme in place.
Brokers who did not possess the necessary qualification required by the FSA were appointed by Accendo and the firm did not distinguish between execution-only and advisory trades.
According to the FSA the various regulation lacunas of the firm led to customers entering into transactions which were unsuitable for them.
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By GlobalDataThe regulator also found that compliance officer White failed to comply with FSA requirements and did not exercise due skill, care and diligence. He has been fined GBP10,000 as part of the punishment.
FSA head of retail enforcement Tom Spender remarked "The FSA regards breaches of its compliance requirements extremely seriously. Customers rightly expect the advice they are given to be based on a robust and properly recorded examination of client suitability – particularly in the case of high risk products such as contracts for differences."
