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The London Stock Exchange today hit stockbroker Blue Oar Securities with a massive £225,000 fine and publicly censured it over its conduct in floating a company on AIM whose shares rocketed thanks to a host of misleadingly optimistic statements.
As the true, disastrous, trading picture emerged, the shares collapsed.
It is the second-biggest fine the LSE has levied on an AIM-nominated adviser and comes as a major embarrassment to the firm, which last week changed its name to Astaire Securities.
The LSE said Blue Oar failed adequately to assess the building and maintenance services company Worthington Nicholls before helping it to float on AIM in 2006, then issued on its behalf a flurry of glowing trading statements which boosted the share price to a peak of 194p from the 50p float price.
However, a few months later a massive profit warning triggered a shares crash to nearly 19p.
The shares were later suspended, £15.9million was written off its assets and Blue Oar was replaced as its adviser.
The shares returned from suspension at just 12.25p and now trade at 10p under the new name of Managed Support Services.
Among the misleading statements was one in November 2006 which gave the impression that orders were shooting up when, in fact, they were down on the previous year.
