Seymour Pierce fined £154,000 for employee's 3-year crime spree

Published on Thursday 8 October 2009 21:28

INVESTMENT bank and stockbroker Seymour Pierce was yesterday fined £154,000 for failing to prevent an employee's three-year crime spree.

City watchdog the Financial Services Authority (FSA) said a worker at the firm was able to steal about 150,000 "completely undetected" from its internal and private client accounts in 36 separate transactions.

A number of the illicit transactions involved making unauthorised changes to static data – such as the client's name, address, bank account and payment instructions – on existing client accounts or taking advantage of dormant accounts.

In one instance, the employee – "Mr A" in FSA documents – transferred a personal trading loss into one of Seymour Pierce's internal accounts.

The worker was dismissed prior to the discovery of the misdemeanours, which only came to light in 2006 when his replacement noticed serious accounting discrepancies.

Seymour Pierce enjoys a high profile in the City, having advised and raised finance for English premiership football clubs including Birmingham City and Newcastle United.

Margaret Cole, the FSA's director of enforcement and financial crime, said: "This is a serious failure on Seymour Pierce's part. The frauds were not sophisticated and could have been detected at a much earlier stage if the proper procedures had been in place.

"Fraud seriously undermines the integrity of our markets, so this fine is a timely reminder of the consequences for firms that fail to have robust systems and controls to prevent unlawful transactions of this sort."

Seymour Pierce agreed to settle at an early stage of the investigation, meaning it qualified for a 30 per cent discount. Without the discount, the fine would have been 220,000.

Seymour Pierce managing director Richard Feigen yesterday said: "Our firm has been the victim of a serious crime. We discovered it, reported it and we have taken appropriate action to prevent even a determined thief from circumventing our controls again, whilst protecting our clients.

"Today's settlement brings this long-running matter to a close but the lessons we have learned will make us an even stronger business in future."

The firm hired consultants to review its systems to ensure "that even such a determined fraud could never happen again".