BusinessCompany NewsFormer CEO fined as FSA flexes its muscles

Former CEO fined as FSA flexes its muscles

The Financial Services Authority has for the first time used its statutory powers to fine a director of a listed company - hitting a former CEO with a £45,000 penalty.

Link: Popstars company loses its fizz

In the process the FSA also sent out a stark warning to company directors who do not communicate effectively with shareholders, coming on the same day as the Financial Reporting Council called for greater convergence between investors and shareholders on corporate governance guidelines.

Yesterday, the City watchdog fined the former head of Sportsworld Media, Geoffrey Brown, £45,000 for misleading investors after finding that the company breached the Listing Rules by failing to notify the market of changes to its expected pre-tax profit situation until more than a month after it became aware of the situation.

The FSA said the company itself would also have been heavily fined if it was not already in the hands of receivers.

Sportsworld Media, the company responsible for the manufactured ‘Popstars’ brand, has been in receivership since April 2002 after it ran out of money.

Andrew Procter, FSA director of enforcement, said: ‘Brown and Sportsworld’s failure to inform investors and other market participants of changes in its performance and expectations as to performance without delay, and not a month later, could have caused investors to make decisions based on inaccurate information.

‘The obligation on listed companies, and their directors, to inform the market without delay of any changes to their business performance is a fundamental protection for shareholders and is vital to ensuring the smooth operation of efficient, orderly and competitive markets.’

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