UK-based insurance firm, Legal & General has launched an appeal before the Financial Services and Markets Tribunal over the Financial Service's Authority's decision regarding L&G's sale of endowment mortgages between 1997 and 1999.
The FSA imposed a £1.1 million fine on the insurer, alleging that it did not have proper sales and compliance procedures in place during the period in question, and as a result, mis-sold the risky investment-based mortgage packages to risk-averse customers.
However, Legal & General has rejected the regulator's claim, arguing that its investigation into the matter was flawed, and that the FSA's Regulatory Decisions Committee is not truly independent.
L&G's challenge before the Financial Services and Markets Tribunal is the first of its kind; in other such cases, firms have agreed to abide by the FSA's decision, and to review their sales procedures and offer compensation.
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