The promotion, headlined 'Invest abroad and receive a 20% return', was for an issue of unlisted, non-voting shares in the property investment company and was published in a free supplement to a national newspaper over three weekends in March 2004 as well as several trade titles, exposing it to more than 200,000 readers. It failed to disclose the significant risks and drawbacks associated with investing in the shares, and contained a misleading statement that implied the offer had in some way been approved under the Financial Services and Markets Act (2000). This could have misled consumers into thinking that the shares had been endorsed by the FSA and were therefore a safe investment.
The FSA's Financial Promotions Department, which monitors the media to detect promotions that breach FSA rules, spotted the advertisement and took prompt action to have it withdrawn.
Anna Bradley, the FSA's Director of Retail Themes, said:
"All firms which produce financial promotions must ensure that they are clear, fair and not misleading, and special attention must be paid to providing a balance between risks and benefits in any promotion for investments. If regulated firms approve financial promotions for other firms, they must remember that it remains their responsibility to ensure they comply with our rules to help consumers to make the right choice about the right product at the right time.
"This promotion was for a high risk, unlisted security with a minimum contribution of £20,000 and contained inaccurate and misleading information. This made the case particularly serious as consumers may have reached an unrealistically optimistic view about the shares without fully understanding the significant risk involved.
"These breaches of our rules arose from the fact Courtover failed to implement adequate procedures, systems, and controls for the approval of compliant promotions despite the considerable work the FSA has done with the industry to highlight the importance we place on this area."
Anyone who sees a financial promotion they think is misleading should report it to the FSA either through the FSA's website or via the financial promotions hotline on 0845 730 0168.
