The regulator has fined W Deb MVL, formerly William De Broe, £560,000 for breach of FSA guidelines.
The FSA says failings in its systems have led to poor accounting systems and inadequate client money protection, that occured over a four and a half year period from December 1, 2001 to May 3, 2005.
Effectively, WDM was unable to monitor its own financial position or to comply with its financial reporting requirements adequately, resulting in the firm making total provisions of £66.3m in its accounts for 2004 and 2005 in respect of assets viewed as irrecoverable.
These provisions in turn led to concerns about the firm’s solvency and to its former parent company, ING, waiving loans totalling £5m to ensure it remained adequately capitalised.
There is no evidence that any clients have suffered any actual loss as a result of the firm’s failings.
An early settlement reduction of 30 per cent was granted to WDM, reducing the fine from £800,000 to £560,000.
FSA director of enforcement Margaret Cole says: “The FSA expects regulated firms to organise themselves so that they are capable of meeting their regulatory requirements and client obligations, this includes having appropriate systems and controls for monitoring its own financial position and safeguarding client money.
“The implementation and maintenance of appropriate systems and controls is essential to maintaining market and consumer confidence in the financial system and individual firms. A firm that fails to meet these basic requirements can pose significant risks to its clients and ultimately its own financial health.”