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L&G challenges £1.1m fine from FSA

The six-week hearing before the Financial Services and Markets tribunal, started yesterday.

The FSA was accused of making a “wholly contrived” case against Legal & General, that could not justify allegations of endownment mis-selling.

The insurance company cliamed the chief financial regulator had assembled flawed evidence because it was anxious to be seen to be pursuing a campaign against endownment mis-selling.

L&G urged the Financial Services and Markets Tribunal to dismiss the FSA&#39s mis-selling charges and strike out the regulator&#39s proposed £1.1m fine.

On the first day of the tribunal hearing, the FSA claimed L&G breached regulatory rules, by selling endownment policies, known as “with profits flexible mortgage plans”, to risk-averse customers betwn 1997 and 1999.

The regulator alleges that L&G had defective sales and compliance procedures to mis-selling of such policies, which were designed to repay mortgages by investing in the stock market.

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