A firm which used "high pressure sales tactics and misleading information" to sell shares has been fined £250,000 by the City watchdog.
The FSA is reviewing the selling practices of small firms
Square Mile Securities was punished by the Financial Services Authority (FSA) after a review of its transactions.
It encouraged customers, including pensioners, to buy shares they did not want or could not afford, the FSA said.
Had it not settled the case, Square Mile might have been fined £1.5m. It said it accepted the FSA's findings.
In a statement, the firm sought to reassure the FSA and its customers, "that we are doing everything in our power, under the guidance of the regulatory authorities, to ensure that we achieve a significant improvement in customer service levels".
This includes overhauling the company's structure, management, culture and systems, it said.
Square Mile will now write to its customers, telling them about the FSA's findings and giving information on how complaints about the firm can be made.
The FSA reviewed 55 of Square Mile Securities' transactions carried out between March and May 2006.
The watchdog said the review found that advisers "frequently used unacceptable sales tactics".
In addition, the company sometimes failed to get a customer's consent before selling them high risk shares, the FSA said.
"High pressured sales practices are wholly unacceptable," said the FSA's director of enforcement, Margaret Cole.
"Firms that use such sales tactics undermine the regulatory requirement to treat customers fairly. A firm's customers are entitled to rely on it to provide them with advice and information that is clear, accurate and not misleading."
The punishment follows a £49,000 fine for Wills & Co stockbrokers in October last year for not making sure that its customers understood the risks associated with penny shares.
"The FSA will not tolerate any regulated firm coercing customers into buying financial products or services they do not want or can't afford," Ms Cole added.
"We are currently reviewing how stockbroking firms conduct their business and will not hesitate to take action against any that falls short of the standards we expect."