December 21, 2011 / 1:06 PM / 7 years ago

Seymour Pierce gets record fine for AIM failings

* Seymour Pierce fined 400,000 stg for AIM failings

* Advisor fined for two separate breaches

* Seymour Pierce accepts findings, changed procedures -CEO

By Yeganeh Torbati

LONDON, Dec 21 (Reuters) - British investment bank Seymour Pierce was fined a record amount on Wednesday for twice falling short of the required standards for advising clients listed on London’s junior stock market.

The company was fined 400,000 pounds ($627,700) for the breaches, said AIM, the London Stock Exchange’s market for junior companies.

That was almost double the previous highest fine for an AIM adviser. Half of the fine will be suspended, depending on whether the firm violates rules again in the next two years.

Seymour Pierce, which specializes in advising small and mid-cap companies, was not quick enough to advise one of its clients to announce that it was running low on working capital and could be in danger of not meeting its obligations, said the AIM Disciplinary Committee (ADC).

“Seymour Pierce had limited visibility of the working capital of the AIM Company and relied almost solely on the (company)’s confirmations that the working capital constraints were a temporary issue,” the ADC said. It occurred between early 2010 and early 2011, the ADC said.

In a separate case in late 2010, Seymour Pierce did not properly check one of the proposed directors of a company applying to be listed on AIM, despite his corporate record repeatedly raising reputational concerns, the ADC said.

The companies involved were not named.

Seymour Pierce Chief Executive Phillip Wale said the bank agreed with the findings and accepted the sanctions.

“There have been significant management, cultural, and procedural changes at Seymour Pierce as a result of this investigation,” Wale said. “We are confident that our systems and procedures are now of the highest standard.” ($1 = 0.6372 British pounds) (Reporting By Yeganeh Torbati; Editing by Elaine Hardcastle)

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