Asset manager WHI raises million pounds after UK watchdog fine

By Huw Jones

LONDON, Feb 23 (Reuters) - Britain's financial regulator has fined W H Ireland 1.2 million pounds ($1.7 million) for inadequate controls to prevent trading abuses, prompting the asset manager and broker to ask shareholders for a similar sum.

The Financial Conduct Authority (FCA) has also banned WHI from taking on new customers in its corporate broking division until May 4. The division is focused on small and mid-cap companies.

Failures between January and June 2013 covered inadequate personal account dealing rules for employees, and insufficient controls to ensure that inside information did not leak to the public side of its business.

Separately on Tuesday, WHI said it raised 1.07 million pounds through a placement of new shares in the market and would use the funds for "corporate purposes".

At 0930 GMT, shares in WHI were up 2.5 percent at 87 pence, below the 90 pence per share placement price.

"We regret that we fell short of the FCA's expectations but since the beginning of my tenure in early 2013, significant changes have been made at the company and new specific oversight functions have been created," WHI Chief Executive Richard Killingbeck said in a statement.

The FCA said WHI had around 87 corporate broking clients, and 9,000 private wealth clients with about 2.5 billion pounds of assets under management when the failings occurred.

The problems were identified in August 2013 in a report from an external or "skilled" person appointed by the watchdog. Some of the report's recommendations were not implemented properly, the FCA said.

"In this case, WHI's failings were aggravated by the failure to implement adequately the skilled person's recommendations," FCA director of enforcement, Mark Steward said in a statement.

"It is one thing to be given a chance, for the chance not to be taken up is especially culpable," Steward said. ($1 = 0.7076 pounds) (Editing by Keith Weir)