Mazars hit with £2m fine over fund advice

It is the latest example of how the Financial Reporting Council (FPC) is using its enhanced armoury of sanctions in a bid to raise standards in a sector criticised for its performance in the run-up to the global financial crisis.

The FRC said yesterday that Mazars and one of its partners, Richard Karmel, had admitted their conduct fell significantly short of the standards that could be reasonably expected.

Mazars said in a statement it regretted its conduct fell below its usual high standards.

“We are pleased that the FRC accepted that the misconduct was neither dishonest nor deliberate, that we took appropriate remedial steps relating to quality assurance, and that it did not cause any actual loss to the beneficiaries of the pension fund,” Mazars said.

The FRC brought a disciplinary case regarding the advice Mazars gave to the trustee of the First Quench Pension Fund, which was £28m in the red, on a proposal to transfer the sponsoring employer from First Quench Retailing to another entity.

First Quench Retail Limited was a wholly-owned subsidiary of UK wine shop chain Threshers, and went bust in 2009.

Mazars was accused of revealing confidential client information to the other and opposing party in the transaction.