The Financial Services Authority (FSA) have reportedly released a statement in which they identify inadequate processes as one of the main reasons behind Hythe Securities being fined two-hundred thousand pounds. The lack of systems and controls has also led to a thirty-five thousand pound fine for the chief executive of the small-cap division Meenaz Mehta; and a subsequent ban on selling penny shares to financial clients and customers whilst in a senior position.

 

The authority's statement makes reference to some of the key issues regarding the company's inadequacy. Noting they had: employed poorly trained advisers, paid them largely by commission, and pressurised them to meet sales targets or face disciplinary action.

 

Representative and director of the Enforcement and Financial Crime division for the FSA Margaret Cole; drew attention to Mr Mehta's own conduct and management of the Hythe Securities sector, reportedly claiming the financial care of customers' interests were far outweighed by his need for profit .

 

The financial sector's regulatory body highlighted the need for brokers to acknowledge the risks that had been taken on behalf of vulnerable investors and their profiles as part of the penny stocks' industry. It has also been reported that the FSA are allowing Mehta to resume employment in large-cap companies authorised by the financial service watchdog.