Square Mile Securities Limited (Square Mile) formerly Halewood International Futures Ltd a stock broking firm based in London specialised in advising and dealing in shares for emerging or small capital companies that have been, or intend to be, traded on the Alternative Investment Market (AIM) and PLUS market.
In January 2008 the Financial Services Authority (FSA) fined Square Mile £250,000 for persistently using high pressure sales tactics and providing inaccurate and misleading information to sell shares to disadvantaged customers.
Between March and May 2006 the FSA reviewed Square Mile Securities Limited and found that 624 customers were recommended and sold almost £4m of shares without first ensuring these were suitable for the customer, inevitably many of the shares dramatically fell in value. The review also showed that Square Mile Securities Limited did not have appropriate controls in place. They were aware their advisers frequently used unacceptable sales tactics and sometimes failed to get a customer's consent before selling them high risk shares. The brokers made false statements in their high pressure sales pitch coercing customers some of whom were old and / or inexperienced investors into buying financial products or services they did not want or could not afford and they failed to disclose important details and significant risks about the shares to their customers.
The FSA found, in one of the worst cases the regulator has ever seen, failings that warranted a fine of £1,500,000. This was reduced to £250,000 because of the financial circumstances of the firm. Due to the extent of the complaints Square Mile Securities Limited subsequently received, it became apparent that the company would not be able to meet its liabilities and Square Mile Securities Limited went into administration in March 2008
In February 2008, the FSA banned Mr Mohammed Suba Miah, a former broker at Square Mile Securities Limited and fined him £21,000 for selling high risk shares to customers without their consent and to have deliberately misled customers by making inaccurate claims about the performance and value of the shares and not explaining the risk involved in buying these. After reviewing nineteen of Mr Miah’s transactions made between December 2005 and May 2006 the FSA found that in over 50% of his dealings, Miah was shown to have been dishonest by recording the purchase of shares without the clients permission and customers would only have been made aware of the trades when they received an invoice for payment. The regulator found that Miah’s actions were considered particularly serious as they lacked integrity as well as exposing customers to risk of financial loss.
In July 2008, the FSA banned Mr Baljit Somal, a former broker, from performing any function in relation to any regulated activity on the grounds that he is not fit and proper. The FSA imposed a financial penalty of £16,000 on Mr Somal for selling high risk shares to customers without their consent and using unacceptable sales tactics. The FSA took this action as a result of Mr Somal's conduct from December 2005 to May 2006 when he was employed by Square Mile Securities Limited.
On 19 February 2009, the Financial Services Compensation Scheme declared Square Mile in default. Meaning Square Mile Securities Limited is unable or unlikely to be able to meet its liabilities and redress eligible claimants.
Important information for ‘nominee account’ clients
Due to inadequate record keeping by Square Mile Securities Limited, the administrators could not accurately reconcile the nominee accounts. If you do not hold share certificates your investments will almost certainly be lost. Therefore, Mis-sold Shares Limited encourages clients to pursue a claim for compensation on the value of your investment as of the date when Square Mile Securities Limited was declared “in default”. It is likely that the value of your investments is substantially less than the original investment you made, but Mis-sold Shares Limited can help to establish if you were a victim of mis-selling in which case you can claim back the total of your losses subject to the FSCS limits. Please contact us for more details.