The Financial Services Authority (FSA) has issued its first fine on a UK stockbrokers firm for leaving customers at risk of fraud through inadequate data security measures.

Following a lengthy investigation, the watchdog concluded that Merchant Securities Group Limited (MSG) failed to put into place measures to identify customers contacting the firm by telephone.

In addition, it was found that the firm routinely sent out personal account numbers in everyday correspondence, while often unencrypted back-up customer data was kept at the house of a member of staff.

As such, MSG has been issued with a £77,000 fine, with the FSA's director of enforcement Margaret Cole arguing that such data security failings are "unacceptable" in a time of increased awareness regarding such issues.

"People have a right to expect their details to be kept secure and firms should be committed to treating their customers fairly in all aspects of their business," she said.

MSG has stated that it has already taken steps aimed at better protecting its clients' information.