The Financial Conduct Authority has fined wealth manager WH Ireland £1.2m after the firm failed to address market abuse issues.
The FCA found that between January and June 2013 the firm did not have proper controls in place to prevent market abuse being detected or occurring.
The regulator also said it was imposing sanctions on the company’s corporate broking division, restricting it from taking on new clients for 72 days.
At the time of the failings WH Ireland had around 9,000 private wealth clients with £2.5bn in assets under management.
The FCA says: “These clients may have bought and sold financial instruments or may have been advised to do so by the firm without the necessary protections in place.”
The regulator says the firm failed to ensure inside information did not leak, had inadequate personal account dealing rules for staff, failed to have a conflict of interest policy, demonstrated a lack of risk management for market abuse, and inadequate post-trade surveillance systems.
The failings were discovered by a skilled person in August 2013, but WH Ireland did not implement all of the changes recommended in the timeframe set.
FCA director of enforcement and market oversight Mark Steward says: “We expect all firms to have the right controls in place to mitigate risks and protect their clients and the integrity of the markets.
“In this case, WHI’s failings were aggravated by the failure to implement adequately the skilled person’s recommendations. It is one thing to be given a chance; for the chance not to be taken up is especially culpable.”
WH Ireland chief executive Richard Killingbeck says in a statement: “As the FCA has noted we have made, and continue to make, wholesale changes to our management team and our systems and controls.
“We regret that we fell short of the FCA’s expectations but since the beginning of my tenure in early 2013, significant changes have been made at the company and new specific oversight functions have been created.”
WHI received a 20 per cent settlement discount on the original fine of £1.5m, and the restriction on new clients was reduced from 90 days.