Upheld: unauthorized sales of shares in breach of discretionary mandate instructions complaint against J.M. FINN & CO.LTD
Financial Ombudsman decision DRN-6325507 of 2026-05-05T00:00:00+00:00. unauthorized sales of shares in breach of discretionary mandate instructions complaint against J.M. FINN & CO.LTD. Outcome: Upheld.
Decision detail
| Reference | DRN-6325507 |
|---|---|
| Decision date | 2026-05-05T00:00:00+00:00 |
| Firm | J.M. FINN & CO.LTD |
| Product | discretionary managed portfolio service |
| Claim type | unauthorized sales of shares in breach of discretionary mandate instructions |
| Outcome | Upheld |
| Remedy | JMF directed to pay: (A) the difference in share values between sale price and 14 March 2024 mid-price for all AMEX and AF shares sold in 2014 and 2015; (B) commissions charged for selling those shares and immediate replacement purchases; (C) reduced by average portfolio growth percentage (excluding AMEX/AF) between each sale and 14 March 2024; (D) reduced by any refund already paid for 2018 sales; plus 8% simple interest from 14 March 2024 to date of acceptance; plus £400 for distress and inconvenience. |
Summary
Mr P complained that JMF sold his American Express and Ameriprise Financial shareholdings without authorization despite clear instructions not to sell them. JMF had informally recorded this restriction since 2012 and multiple communications from 2008-2013 acknowledged these holdings were outside its discretionary domain. JMF sold the full AF holding in March 2014 and AMEX shares across 2014-2015, citing portfolio diversification and tax efficiency reasons. Mr P raised concerns in December 2015 and again in December 2017, when JMF offered to formalize the restriction via an Investment Restrictions form that Mr P did not complete. The ombudsman upheld the complaint for the 2014-2015 sales, finding JMF breached its obligations by selling shares it knew should not be sold, and directed compensation based on share value differences, commissions, and portfolio growth adjustments, plus £400 for distress.
The Ombudsman's reasoning
The ombudsman found that JMF had clear instructions not to sell the AMEX and AF shares, evidenced by multiple communications over several years acknowledging these holdings were outside its discretionary domain. Although the restriction was not formally documented in the original application, the consistent understanding between both parties meant JMF was obligated to respect this objective when managing the portfolio. The sales in 2014 and 2015 breached this obligation. However, sales after 28 December 2017 were excluded from redress because JMF had clearly informed Mr P that a formal Investment Restrictions form was needed to prevent further sales, and Mr P did not complete it. The ombudsman rejected arguments that Mr P's inaction to post-trade letters constituted acceptance, finding instead that Mr P had delegated investment decisions to JMF and was entitled to rely on it adhering to his stated objectives. A 10-year holding period from the first sale date was deemed fair compensation methodology.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| J.M. FINN & CO.LTD, all decisions | 13 | 19% |
Source
Read the original decision on the Financial Ombudsman Service website