Accounting regulators have dished out more than £9million of fines to EY and PWC for their roles in the London Capital & Finance scandal, which saw thousands of savers lose £237million.
The Financial Reporting Council’s deputy executive counsel Jamie Symington said EY, PWC and small accountant Olive Clive & Co and their respective audit partners were fined for failing to identify and assess fraud risks at LCF.
PWC was fined £4.9million for its 2016 audit of LCF and EY £4.4million for its 2017 audit. Olive Clive & Co was fined £42,000 for its 2015 audit, while over £166,000 in fines were handed out to partners at all three accountancy groups.
LCF sold minibonds to savers, risky, unregulated investments. Its failure in early 2019 left 11,625 investors nursing losses of £237million. The Serious Fraud Office is investigating a number of individuals linked to LCF for fraud and money laundering offenses.
Symington said: “These breaches are made considerably more serious by the fact that all of the auditors knew they were auditing an expanding business which was engaged in selling unregulated financial products to retail investors, and that potential investors might place reliance on the clean audit opinions.”
The three accountancy firms and the three audit partners received reduced fines for co-operating with and for admitting their failures to the FRC.
