RSM Tenon fined for selling Lehman-backed investments

RSM TENON has become the first financial services firm in the UK to be fined for selling complex investments backed by failed US bank Lehman Brothers.

The Financial Services Authority said yesterday that it had fined Tenon 700,000 for "significant failings" in the advice it gave and the processes used to sell these structured products to wealthy clients between November 2007 and August 2008.

It added that during that period, Tenon also failed to treat some of its customers fairly, and did not have proper systems in place to prevent unsuitable advice in its structured product and pension switching business.

Lehman collapsed in September 2008, leaving investors in its structured products out of pocket. It is estimated that 5,600 people across the UK lost a total of 107 million as a result.

Customers who had unsuitable advice will now be able to sell their investments back to Tenon, and have the money they invested reimbursed with interest.

Tenon, which has a number of offices in Scotland, is one of three advice firms referred for enforcement so far as a result of the FSA's review into structured products, which was completed in October 2009.

It is the first firm to be fined, and would have faced a maximum penalty of 1m had it not co-operated with the FSA investigation.