The Norwich and Peterborough building society has been fined £1.4m for mis-selling investments to 3,200 customers.
The Financial Services Authority (FSA), which imposed the fine, said the society had failed to give them suitable advice.
The N&P sold high-risk policies provided by the now insolvent Keydata investment firm, which the FSA says were inappropriate.
The society has already agreed to make compensation payments totalling £51m.
“N&P failed in its basic duty to provide suitable advice to its customers, despite an internal compliance report pointing out that there were problems as early as 2007,” said Tracey McDermott, the FSA’s acting enforcement director.
“Firms cannot treat customers fairly unless they pay attention to their financial circumstances and attitude to risk when they make recommendations,” she added.
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Building society given £1.4m fine