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British financial regulator warning over penny share selling
Sep 16, 2009, 16:17 GMT
London - Britain's financial services regulator on Wednesday warned against the aggressive selling of so-called penny shares.
This year 11 companies have already been banned for using dubious methods in selling securities to older people, the Financial Services Authority (FSA) said.
The companies, of which six have ceased trading, will not be allowed to sell low value stocks until their sales practices are reviewed, according to the FSA.
The number of European investors who had been pressured into purchasing penny stocks was still unclear.
The FSA advised investors to verify any advice from dealers and to weigh risks themselves, saying a stockbroker should be asked about their commission fee.
Authorities in Britain have been clamping down on companies selling penny shares and contracts for difference, or CDFs, to private investors without adequately conveying the risks.
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