Seymour Pierce hit with record fine

INVESTMENT bank Seymour Pierce has been fined a record amount for twice falling short of required standards for advising clients listed on London’s junior stock market.

The company was fined £400,000 for the breaches, said the Alternative Investment Market (AIM) of the London Stock Exchange.

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

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Seymour Pierce, which specialises 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,” said the ADC.

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.

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Head of AIM regulation Nilam Statham said: “Nomads have key responsibilities, both in terms of assessing the suitability of companies for the public market and in properly advising and guiding companies once admitted to AIM.” 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,” said Mr Wale. “We are confident that our systems and procedures are now of the highest standard.”

Seymour Pierce advises Yorkshire AIM-listed firms including coal miner ATH Resources and medical devices manufacturer Surgical Innovations.

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