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Cenkos fined more than £500,000 for insurance dealings

Cenkos fined more than £500,000 for insurance dealings

Cenkos fined more than £500,000 for insurance dealings A stockbroking firm has been hit with a fine in excess of £500,000 for its dealings with under-fire insurance company, Quindell.

The Financial Conduct Authority (FCA) has issued a £503,500 penalty to Cenkos Securities for what it deems as flaws in its handling of the insurer’s failed to attempt to move from London’s junior Aim market across to a prestigious listing on the London Stock Exchange back in 2014. The broker agreed to settle early with the FCA in the face of a potentially larger fine of £757,800.

Cenkos acted as the house broker for Quindell up to last August but the FCA found that “it had not carried out the requisite due diligence” when it attempted to secure the premium listing.

In addition, the broker was also found to have failed to account for the impact on the listing of a note from Gotham City Research which heavily criticised the insurer. The criticism led to shares in the insurer tumbling and prompted concerns about the company’s finances, which ultimately proved to be valid.

The Telegraph described the fine for Cenkos as a “significant blow” to its reputation with the company having earned prominence two years ago for assisting the AA with its stock market float.

In response, Cenkos told the publication: “Since 2014, the company developed and implemented an extensive remediation programme to enhance and improve its systems and controls in relation to its sponsor services, including steps taken in consultation with the [UK Listing Authority].”

Quindell meanwhile, which has since renamed itself as Watchstone, is currently under investigation from the Serious Fraud Office over allegations that it radically revised past accounts to represent itself as loss-making last year when it had previously informed investors that it was profitable.