Upheld: Investment mis-selling complaint against IG Trading and Investments Limited

Decision detail

Summary

Mr B held shares in company T within an ISA managed by IG. When T issued an optional redemption offer allowing shareholders to sell at a market-beating price, IG received the offer details but failed to notify Mr B, causing him to miss the deadline. IG initially falsely claimed the offer was mandatory, later retracted this and offered £250. The ombudsman found IG breached its contractual obligation to use reasonable efforts to notify customers of corporate actions and failed to meet regulatory requirements to treat customers fairly and consider their best interests. IG could not demonstrate that notifying Mr B would have been impractical, particularly as it had the infrastructure to notify of similar offers and the means to process redemption requests. The ombudsman upheld the complaint and ordered IG to calculate redress based on the difference between what Mr B would have received under the redemption offer (either 100% or 45.8% of shares depending on IG's verification) and what he actually received when selling on 9 February 2026, plus 8% simple interest calculated in two tranches.

The Ombudsman's reasoning

The ombudsman found that IG's terms require it to use reasonable efforts to notify customers of corporate actions unless impractical. IG failed to demonstrate that notifying Mr B of T's redemption offer would have been notably impractical, particularly given that IG had the infrastructure to notify of similar offers (tender and exchange offers) and the means to process redemption instructions (as evidenced by other customers' successful participation). The distinction IG drew between T's offer and other similar offers was arbitrary and unfair. IG's failure breached both its contractual obligations and regulatory requirements to treat customers fairly, consider their best interests, and meet their information needs. The ombudsman rejected IG's execution-only defence, finding that IG's own terms fairly obliged it to notify Mr B. On the quantum of loss, the ombudsman found it more likely than not that Mr B would have participated in the offer based on his track record and prompt challenge to IG's failure. The ombudsman also found that Mr B acted reasonably in mitigating his loss by selling when he did. Regarding the redemption cap, the ombudsman determined that despite IG's claims, the evidence suggested only 45.8% of shares would have been redeemed, but required IG to verify this through its own records before calculating redress.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website