Panmure Gordon, the stockbroker, has been fined pounds 50,000 plus costs of pounds 10,000 and severely reprimanded by the Securities and Futures Authority (SFA) over a pounds 3m fraud by a former employee.
The SFA yesterday criticised Panmure for "inadequate protection of clients' assets, for failure in its control of its internal affairs and for failing to adequately train and properly supervise its staff."
The City regulator also banned the fraudster concerned, Jeremy Gray, from further investment business and ordered him to pay costs of pounds 4,000. Last October Mr Gray was jailed for six years after being convicted of stealing more than pounds 3m. Gray, 27, laundered shares owned by his father and the British Heart Foundation. He did this while working as an assistant to a director in Panmure's private client stockbroking department.
Panmure discovered the frauds in the spring of 1994, seven years after Gray joined the firm. Panmure immediately informed the SFA and the police.
Gray, of Clapham, south London, was convicted last October of theft, false accounting and handling stolen goods. Panmure is still trying to recover money from accounts in Denmark, the Netherlands and Austria.
The SFA said that in January 1994 Mr Gray directed that around pounds 55,000 held by Panmure on behalf of a client should be transferred to a Luxembourg account. In the following month Gray directed the transfer of pounds 3m of stock held in a "depot" account in New York, on behalf of another client, to a third party in New York.