Watchdog bares teeth with £2.4m fine for oil group Lamprell
Tuesday 19 March 2013
The City regulator bared its teeth yesterday, showing that companies listed on the London stock market can expect much larger fines for breaking its rules.
The Financial Services Authority, which next month hands over its powers to the Financial Conduct Authority, fined the oil services group Lamprell £2.4m for failing to keep investors informed ahead of a profits warning which wiped 57 per cent off its share price.
The fine dwarfs previous penalties for similar offences, with Photo-Me fined £500,000 in 2009, JJB Sports £455,000 in 2011 and Wolfson Electronics £140,000 in 2009.
The fine is the first imposed under the regulator's new regime, which is based on a quoted company's market capitalisation.
The FSA said: "This is expected to lead to significantly higher penalties than in the past."
Lamprell's financial position began to deteriorate rapidly from early in 2012 as projects fell behind budget and it employed too many contract staff on one major scheme.
But it continued to issue upbeat messages to the stock market. These included:
* 26 March 2012: "The board remains optimistic that the long-term prospects of the group continue to be promising";
* 25 April: "This is another significant contract award, demonstrating the health of the market for jack-up rigs";
* 1 May: "This further evidences the sustained demand for these rigs and the confidence in Lamprell's ability to deliver."
But on 16 May the company issued its profits warning and the shares collapsed.
The FSA said that monthly reports to the board had been totally inadequate for a company of its size and that such reports were delivered late.
It also said the takeover of a rival in 2011, which doubled Lamprell's size, had left the company using too many different reporting systems.
Tracey McDermott, the FSA's director of enforcement and financial crime, said: "Lamprell's systems and controls may have been adequate at an earlier stage, but failed to keep pace with its growth.
"As a result they were seriously deficient for a listed company of its size and complexity, meaning it was unable to update the market on crucial financial information in a timely manner."
It is understood that the FSA is not pursuing any individuals at the company or its financial advisers.
John Kennedy, the chairman of Lamprell, said: "The board recognised that it was in the best interests of the company to accept the position reached with the FSA, so as to avoid incurring significant additional expenses and expending the further time that would be required to pursue the matter."
- 1 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 3 Mystery man who gave mum heart-warming note on train 'wanted to put a smile on her face'
King Salman: Just five days in, Saudi Arabia's new king has already overseen a beheading
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Mystery man who gave mum heart-warming note on train 'wanted to put a smile on her face'
Michelle Obama highlights harsh restrictions faced by Saudi women after meeting King Salman without wearing a headscarf
Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
British grandmother Lindsay Sandiford faces execution by firing squad in Indonesia
Liberal Democrat minister defends comments suggesting immigration causes pub closures
iJobs Money & Business
£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...
£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...
Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...
£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...