Ruling on Tuesday, the UK's Financial Services and Markets Tribunal substantially watered-down charges brought by the Financial Services Authority against insurance firm, Legal & General.
L&G was fined £1.1 million by the FSA in 2003 over the mis-selling of risky endowment mortgages to customers seeking low risk arrangements between 1997 and 1999. Although the Tribunal this week supported that allegation, it disputed that such mis-selling was as widespread as the financial services regulator had claimed.
The panel also provisionally stated that the penalty amount suggested by the FSA should be reduced.
Lawyers in the UK have suggested that the decision is likely to leave the FSA feeling bruised. Speaking to Reuters following delivery of the verdict, Allen & Overy partner, Simon Gleeson observed that:
"What we saw was the FSA coming on heavily and being taken on by the industry and pretty much losing. I think Legal & General will feel they have done a good day's work."
Legal & General has welcomed the decision. The FSA, meanwhile, announced that it would give "careful consideration to the Tribunal's observations on its handling of this case and look to identify improvements to its own procedures as a result".
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