The firm failed to properly apportion roles and responsibilities to its senior management and for not having systems in place to ensure that its advisers were trained and competent. As a result of these failings, customers were potentially put at risk.
Between January 2003 and November 2005, Langtons failed to allocate responsibilities among its senior management effectively. The resulting confusion over senior management roles meant that its systems and controls were inadequate and its business was not compliant. Consequently, Langtons did not have in place key safeguards to ensure its customers were protected.
Langtons failed to determine the training needs of its investment advisers. Furthermore when training was undertaken it was not properly evaluated or recorded. Langtons did not assess the continuing competence of its advisers or ensure that those under supervision were being adequately monitored.
Margaret Cole, director of enforcement of the FSA, said: "Langtons' senior management could not show that they understood or even knew their responsibilities as a regulated business and thereby the firm unnecessarily exposed its consumers to potential risk.
"Responsibility for proper systems and controls and for compliance with rules designed to protect consumers ultimately lies with a firm's senior management, and we expect them to take these responsibilities seriously."
The failings also meant that Langtons' complaints handling procedures were inadequate and it failed to ensure complaints were dealt with independently. Additionally, the approval of its financial promotions was not carried out by a person with appropriate expertise to ensure that they were clear, fair and not misleading.
Langtons' failings were discovered during an FSA visit to the firm rather than through its own systems and controls.
In determining the level of the financial penalty, the FSA took into account that Langtons has engaged an independent consultant to review its compliance arrangements and its financial promotions procedures. By agreeing to settle at an early stage of the investigation Langtons also qualified for a 30 per cent discount, without which the fine would have been £90,000.
