Legal & General mortgage mis-selling fine "flawed"

Legal & General's £1.1 million fine for endowment mis-selling should be reduced, a tribunal has ruled.

The Financial Services and Markets Tribunal ruled that the extent of the mis-selling problem was not as large as originally thought.

As such, it announced the investigation was "flawed".

It is believed to be a big knock-back for the Financial Services Authority (FSA), as the original action was seen as a test case.

In a statement, the FSA said it would give "careful consideration" to the tribunal's observations and "look to identify improvements to its own procedures as a result".

Financial Mail uncovered emails as far back as 1998, showing that senior directors at L&G were aware that endowments might no longer be suitable.

However, according to the Financial Mail the firm continued to sell the policies for another two years.

The tribunal said yesterday's ruling would not affect any of the current claims for compensation.

A ruling on whether the FSA would have to repay any of the £1.1 million fine was delayed until a later date.