The Financial Services Authority (FSA) has fined Standard Life Assurance Limited £2.45million for serious systems and control failings for its Pension Sterling Fund.
The failings meant that approximately 98,000 retail pension customers who invested in the Fund before 23 December 2008 had been misled. The Fund, which was supposed to be invested largely in cash, was actually mainly invested in riskier 'asset-backed' investments.
As a result, the Fund dropped suddenly last January, causing investors to lose five per cent and sparking claims that the pension fund provider had supplied misleading literature.
Commenting, Margaret Cole, FSA director of enforcement and financial crime said: "The FSA takes the issue of misleading financial promotions very seriously and the fine announced today demonstrates our commitment to the principle of credible deterrence.
"It is critical that consumers are given an accurate understanding of the nature of investment products and the risks involved. Without this information, consumers are unable to make informed decisions about whether investments are suitable for their individual investment strategy."
Standard Life agreed to settle early, resulting in a 30 per cent reduction of the fine that would otherwise have been £3.5million.
Investors in the Standard Life Pension Sterling Fund were refunded for their losses early last year.
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