Watchdog bites over mis-selling

CITY watchdog the Financial Services Authority is expected this morning to fine Capita Trust Company £300,000 for mis-selling precipice bonds.

The firm, formerly a branch of insurer Royal & SunAlliance, is also expected to have to pay £3.5m in compensation.

Capita Trust is understood to have co-operated with the regulator.

A number of firms including Lloyds TSB, which owns insurer Scottish Widows, have been disciplined over the bonds.

They are high-risk stock market investments, which are dubbed 'precipice bonds' because their value could drop dramatically if share prices dived.

High-profile financial adviser David M Aaron was recently banned from doing business by the regulator after it was found to have mis-sold the bonds.

RSA was also hit last year with a £950,000 fine for mis-selling endowment mortgages. The FSA accused it of 'serious failings'.