The Financial Services Authority (FSA) fines one firm and two individuals in relation to their sale of Lehman-backed structured products between November 2007 and August 2008. It finds Dundee-based law firm, Thortons Law LLP (Thortons) to have failed to give suitable advice to its customers of the nature and high risks involved in structured products, and has imposed a fine against it in the amount of ₤35,000. Likewise, it finds the law firm’s partner, Michael Royden, to have been remiss in not adequately informing himself about Lehman-backed structured products prior to Lehman’s insolvency, and in delegating day-to-day compliance tasks to another person, for which he is fined separately for ₤10,500. Lastly, FSA finds a financial adviser at McClelland Yarr, Robert Peter Yarr, to have not warned customers of the counter-party risk associated with structured products, failed to keep adequate records, to conduct product research and to ensure sufficient compliance oversight and management at the firm, for which he is imposed a separate fine of ₤28,000.
While the investigation against them was still ongoing, Thortons, Royden and Yarr fully cooperated. They settled at the early stage of the proceeding, hence, they were given a 30% discount in accordance with executive settlement proceeding of the FSA.