Private censure and fine for Nomad

Print publication


The London Stock Exchange has announced that it has privately censured and fined a Nomad £90,000 for breaching the AIM Rules for Nominated Advisers, specifically:

Nomad Rule 16 – due care and skill
Nomad Rule 17 – advising and guiding an AIM company
Nomad Rule 19– liaison with the London Stock Exchange.
The failures in question related to notification by the AIM company pursuant to AIM Rule 11 of the AIM Rules for Companies (concerning the disclosure of price sensitive information). The company had notified the market that it was due to receive payments, which were material to its business, at a stipulated future date. However, the payments were not made on that date and the company failed to update the market. For its part, the Nomad failed to advise the company of its obligation to update the market.

The Nomad justified its actions by saying that the payments, although late, were expected very shortly. It also advanced an argument based on the precise meaning of payment obligations. Neither argument impressed the London Stock Exchange, who stated that the failure to update the position regarding the time for payment had left the market with a misleading impression.

Walker Morris comment
Where a statement has already been made to the market concerning, for example, renewing a key contract, drawing down a new facility or anticipated results, anything which would affect the veracity of that statement must be notified to the market, where a failure to do so would render the initial statement misleading. The case is a reminder for Nomads to keep under review all the announcements made by the companies for whom they act as Nomad.