The FCA has fined two of the bosses behind a failed spread betting business for helping hide a more than £15m cash shortfall from investors.
The regulator has also imposed a permanent ban on both individuals from engaging in any regulated activity.
Worldspreads Limited collapsed in March 2012. Its holding company had listed on Aim five years earlier.
The FCA found that Worrldspreads chief financial officer Niall O’Kelly played a part in approving documentation for the floatation which left out key information for investors and contained other misleading statements.
O’Kelly also helped orchestrate a set of fake client trading accounts which, combined with unauthorised use of accounts belonging to actual clients, were part of a hidden “internal hedging” strategy at the firm.
O’Kelly, alongside financial controller Lukhvir Thind, passed auditors “falsified critical financial information concerning Worldspreads’ client liabilities and its cash position” for its 2010 and 2011 annual accounts, hiding shortfalls in its client money position to investors amounting to £15.9m.
FCA director of enforcement and market oversight Mark Steward said: “Mr Thind and Mr O’Kelly deliberately and repeatedly disseminated false and misleading information relating to a publicly listed company. Their actions amounted to serious market abuse, undermining the integrity of our markets and this will not be tolerated.”
Thind was fined £105,000 and O’Kelly was fined £11,900 after both agreed to settle at an early stage of the regulator’s investigation.