ER Receives £245,000 Fine

LONDON: The U.K.’s  Financial Services Authority (FSA) has imposed a £245,000 fine on Entertainment Rights (ER) for failing to disclose a fall in its 2008 projected profits in a timely manner.

The breach dates back to a December 2006 U.S. home entertainment agreement for ER and its Gold Key Home subsidiary. A change to that deal that came into effect in July 2008 resulted in a $13.9 million reduction in ER’s estimated profits for 2008. ER delayed making an announcement about the revision until late September. When the news was issued, ER’s share price fell 55 percent. "The lack of timely disclosure led to a false market in Entertainment Rights’ shares for about 78 days," the FSA stated.

In deciding on the fine, the FSA said it considered ER’s moves to bolster its board, as well as the fact that the kids’ entertainment company admitted to the breach and fully cooperated with the investigation. As such, ER qualified for a 30-percent discount under the FSA early settlement discount scheme; the fine would have been £350,000.

ER in a statement said it accepted the judgement and would not appeal. The £245,000 fine will appear as an exceptional charge on ER’s results for this financial year.