FCA fines WH Ireland £1.2m over market abuse failings

The Financial Conduct Authority has fined WH Ireland £1.2m and banned it from taking on new corporate broking clients over the next 72 days.

The city watchdog said the wealth management and corporate broking firm had failed to make sure there were effective systems and controls in place to protect against the risk of market abuse between 1 January and 19 June 2013.

Among the failings, the FCA pointed to “deficient controls to ensure inside information did not leak from the private to the public side of its business or in ensuring disclosure to external parties was conducted in a controlled manner with proper safeguards in place”.

The regulator also said WH Ireland had failed to maintain an effective written conflicts of interest policy and had inadequate recording of the kinds of service or activity carried out by WHI in which a conflict of interest had arisen or may arise.

It said the range of services the company performed during this time meant it was exposed to a broad range of market abuse risks.

The FCA said WH Ireland received inside information on a regular basis and as such, there was “significant scope” for an adverse impact on the market and on a large number of other market participants if that information was mishandled.

Mark Steward, director of enforcement and market oversight at the FCA, said: “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’s chief executive, Richard Killingbeck, said: “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.

“This cultural change will continue to lead to the improvement in the regulatory oversight across the company.”

At 1218 GMT, shares were up 3% to 87p.