Page last updated at 14:45 GMT, Wednesday, 16 September 2009 15:45 UK

Ban for sales of 'penny shares'

FSA headquarters
The regulator has taken action against 11 firms

Eleven firms have been ordered to stop selling so-called penny shares to older investors, the City watchdog says.

The Financial Services Authority (FSA) said some dealers had been targeting older people with high-pressure sales.

The 11 firms were told to overhaul their business model, and six have since ceased trading.

High-risk penny shares have a low market price, are not traded on the main stock market and are difficult to sell on.


The FSA said that people aged over 50 who already had a few shares - often from privatisations - were being targeted.

In some cases, brokers were paid commission to sell a particular share which was then aggressively marketed to consumers, regardless of whether or not it was suitable for them.

"It is totally unacceptable to have consumers pressurised into buying shares. It is all the more disturbing when the risks of those shares have not been set out clearly," said Lesley Titcomb, of the FSA.

"Quite simply, if firms do not treat their customers fairly, they will not be operating in the market."

The FSA urged investors to challenge a brokers' advice, do their own research into a product, be aware of any risks attached and ask what commission a broker got for arranging a sale.

Print Sponsor

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Sign in

BBC navigation

Copyright © 2017 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific