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Clarkson Hill reveals FSA probe into systems and controls

Clarkson Hill has revealed it was subject to a regulatory review of its systems and controls during the second half of last year, as it posted pre-tax losses of £636,699 for 2009.

The company says independent consultants have reviewed the group’s processes and revisions have now taken place to bring them in line.

This has resulted in what the company terms as “significant exceptional costs” of £230,787.

The company’s results for the year to December 31, published today, show that Clarkson Hill posted a pre-tax loss on ordinary activities of £636,699 – a marginal improvement on the £669,207 losses posted for the prior 17 months.

The results also reveal Clarkson Hill has been invoiced for £105,000 in relation to the £80m Financial Services Compensation Scheme levy for Pacific Continental Securities (UK), Square Mile Securities and Keydata Investment Services.

The £105,000 has been backdated to 2009 and been reflected in the accounts and identified as an exceptional item, as it is now subject to the judicial review.

A further £129,320 of exceptional costs were incurred as a result of redundancies and the renegotiation of office contracts.

In total, Clarkson Hill were hit with exceptional costs of £465,107.

Following the losses incurred in 2009 and the increased regulatory costs, the group needs to raise further capital to meet regulatory capital requirements.

The directors are currently in discussions with a number of parties and say they are confident that this objective will be achieved.

Clarkson Hill had its shares suspended from trading on AIM yesterday as it was unable to publish its accounts on time. After publishing its accounts today, it has now been able to resume trading.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. About time too – I notified the FSA nearly 2 years ago that Clarkson Hill had taken on without question an AR I had booted out of my network for fraud, but they did nothing about it – at last they have taken some action, as clearly this firm has demonstrated a lack of controls that puts consumers at risk and gives the industry a bad name.

  2. How can any firm be expected to cope with a request for £105,000 for something over which they had no control?

  3. Stephen Barlow 2nd July 2010 at 2:33 pm

    If you are concerned about the future and want to look at an alternative please give me a ring.

    07827 890049.

  4. Where do we go next? 2nd July 2010 at 2:38 pm

    The company announced that the accounts would be out by the end of May.

    To miss that target by over a month, resulting in the supension of the shares, is careless indeed, especially for a financial planning business!

    Maybe it’s time I looked elsewhere. Mind you there seem to be very few IFA firms which have businesses built on anything other than pretty shaky foundations.

    Suggestions on a postcard please!

  5. chris Latchum 2nd July 2010 at 3:03 pm

    the way the IFA world is dissapearing it could be answers on a postage stamp, I have a feeling there will be other firms in this position

  6. Richard Hammond 5th July 2010 at 5:23 pm

    Some might call this Poetic justice given that one Peter McEvoy (Clarkson Hill) FSA # 425654 was a sales director at City Financial Partners Limited (CFPL – there’s a blast from the past), the sales director in fact, who recruited, trained etc amongst others……Jasal Patel of First Trade UK Limited (CF1 Director) Square Mile Securities Limited (CF16 Significant Mgt) & Square Mile and Pacific Continental (CF16 Significant Mgt )
    &
    Roy Seeballuck (Square Mile Securities/Pacific Continental)

    I feel greater sympathy for everyone else that has been hit by this levy

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