UK's Financial Services Authority (FSA) has fined investment services provider Rowan Dartington & Co GBP511,000 for failing adequately to protect and segregate client money for over two years.
Under the FSA’s client money rules, firms are required to keep client money separate from the firm’s money in segregated accounts with trust status. This protects client money in the event of the firm’s insolvency.
According to FSA, in a series of breaches between May 2007 and September 2009, Rowan Dartington placed its clients’ money at risk by failing to segregate client money for contingent liability business, including spread bets and options. The firm also failed to properly ensure it had the correct trust letters from its banks and counterparties.
FSA also said that no clients have suffered actual financial loss as a result of these issues.
Margaret Cole, director of the enforcement and financial crime division at FSA, said: “Rowan Dartington & Co committed a serious breach of our client money rules by failing to protect its clients’ money. The breaches took place over a long period and the risks they posed were compounded by the fact that this was a period of market turmoil.
“Ensuring the necessary client money safeguards are in place is a key element of consumer protection, and firms of all sizes must ensure that any client money they hold is properly segregated.”