FSA fines Seymour Pierce for employee fraud

FSA fines Seymour Pierce for employee fraud

Seymour Pierce has been fined £154,000 by the UK's Financial Services Authority (FSA) for failing to prevent an employee stealing from the stockbroker and its clients.

The watchdog says the City firm failed to establish effective controls to guard against employee fraud, enabling the staffer to steal around £150,000 "completely undetected" in 36 separate transactions over a three year period.

The illicit transactions involved changing names, addresses and bank account details on clients' accounts as well as using dormant internal accounts. On one occasion he also transferred a personal trading loss into one of Seymour Pierce's internal accounts.

The fraud was only discovered after the employee had been fired for a separate offence and his replacement noticed accounting discrepancies.

Margaret Cole, director, enforcement and financial crime, FSA, says: "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."

The firm qualified for a 30% discount on the fine for agreeing to settle at an early stage.

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