Case study 3A stockbroking firm advised a widow in her late 70s to invest part of her €1.5 million portfolio in a number of technology shares when she had made it clear that she did not want any high-risk shares to be included.

The leading stockbroking firm also misled the woman about the nature of a bond investment, failing to mention that any exit from the investment before the end of its 10-year term would be subject to a penalty of 9 per cent.

The ombudsman also found that the customer had been led to believe that she would receive tax-free income for the 10 years of the investment, whereas the income was actually a repayment of her own money, thereby eroding the capital invested.

The ombudsman found that the stockbroking firm was guilty of negligence and that there was a breach of duty to the complainant in respect of the advice it had given her.

He directed that the stockbroking firm refund to the complainant all fees in relation to the bond to date - a sum of €17,000 - and to charge no further commission in fees.

The ombudsman also directed that the stockbroking firm pay the complainant compensation of €1,500.