FSA fines and bans Cattles directors over ‘devastating’ irregularities
The Financial Services Authority has also publicly censured Batley-based Cattles and its subsidiary Welcome Financial Services Limited for publishing misleading information.
James Corr, Cattles’ finance director, has been fined £400,000 and Peter Miller, Welcome’s finance director has been fined £200,000, and both have been banned from performing any functions in areas the FSA regulates.
Advertisement
Hide AdAdvertisement
Hide AdThe authority has also banned John Blake, Welcome’s managing director, and fined him £100,000. He has referred his case to the Upper Tribunal. The FSA said all three fines had been reduced “on account of the directors’ current personal financial circumstances”.
In a statement today it said the actions had been taken “because a number of the FSA’s market abuse, listing and disclosure rules, as well as Principles for Businesses, were found to have been breached”.
Cattles was listed on the London Stock Exchange and in 2008 was a member of the FTSE 250, but has since been delisted. The firm is still operating but is not taking on new business.
The FSA report said: “Cattles’ 2007 annual report contained highly misleading arrears, impairment and profit figures. It stated that only £0.9 billion of Welcome’s approximately £3 billion loan book was in arrears, when if accounting standards had been properly applied the correct figure would have been around £1.5 billion. Cattles also announced a pre-tax profit of £165.2 million for 2007, but if accounting standards had been correctly applied Cattles would have suffered a pre-tax loss of £96.5 million.”
Advertisement
Hide AdAdvertisement
Hide AdTracey McDermott, the FSA’s acting director of enforcement and financial crime, said: “The consequences for shareholders of the misleading statements issued by Cattles and Welcome have been devastating. These directors failed to act with integrity in discharging their responsibilities. They failed in their obligations to shareholders, the wider market and the regulator.
“In order for markets to function properly, information given to investors must be accurate. Directors of listed companies must act with integrity and exercise appropriate diligence when making disclosures to the market. They should note the personal consequences for those who fail to meet our requirements.”