RSM Tenon disagrees with insurers over picking up the cost of remedial action relating to the firm's FSA fine and settlement
A DISPUTE has arisen between RSM Tenon and its insurers over who should pick up the tab for costs arising from the firm’s Financial Services Authority (FSA) fine in 2010.
RSM Tenon was fined £700,000 by the FSA for “significant failings in its advice and sales processes relating to Lehman-backed structured products”. The FSA had found poor systems and controls of the marketing and distribution of structured products and in its pensions-switching business.
The advisor’s latest set of accounts has revealed an argument with its insurer over sharing out the cost of undertaking remedial action arising from the FSA settlement.
RSM Tenon is also looking for indemnification of the whole of the redress payments required to be made to investors from insurers subscribing to its professional indemnity programme.
Its financial management service line took a £4.3m costs hit in 2012 in terms of dealing with obligations arising from the FSA settlement.
“A dispute has arisen between the group and its insurers as to the extent to which the sums claimed are covered under the programme, and insurers disagree between themselves as to how their liability for those sums should be shared. These disputes have been referred to arbitration,” the firm said in its statement to the stock exchange.
An outcome is expected before the end of the financial year.