Chase de Vere advisers sold Keydata products to 2,806 customers, investing £49.3m in the process.
Under the Financial Services Compensation Scheme eligible customers have been compensated up to the scheme limit; £48,000 per customer.
Of the 139 customers who invested a total £4.4m the majority are not expected to recover their full losses from the investment.
Tracey McDermott, FCA director of enforcement and financial crime, said: “Firms need to ensure that they fully understand and explain to customers the risks of investing in the products they are offering.
“That includes researching the products thoroughly before they decide to offer them and ensuring advisers have the tools they need to explain the risks to customers.
“Chase de Vere failed to do this, leaving its customers without a full understanding of the risks they were taking by investing their money in Keydata products.”
The firm will review its sales to customers who have not already made a claim about Keydata.
Chase de Vere agreed to settle at an early stage of the investigation, qualifying for a 30% discount.
Without the discount it would have been fined £800,000.
