UK Watchdog fines MyTravel £240,000

MyTravel has been fined £240,000 ($450,000) by the City watchdog for failing to tell investors about a change in its profit forecasts.

The Financial Services Authority (FSA) said it had not told investors promptly about a one-off £24.3m ($45m)loss in 2002, which was likely to affect profits.

The FSA said this meant investors could not assess the likely impact on shares.

MyTravel said it had not deliberately intended to mislead investors or withhold information.

It said that the change to its figures came about as a result of “accounting or reconciliation errors”, adding that its then finance director and chief executive had expected other exceptional gains would offset the one-off cost.

As a result, MyTravel thought the one-off cost would not affect its profit forecasts.

The decision not to make the announcement in July 2002 was “a complex matter of judgment on which there can be more than one opinion”, the firm said in a statement.

The group reached a settlement with the FSA, under which it accepted the fine and withdrew a planned appeal.

Last month, MyTravel said its recovery was “on track” after revealing a 36% reduction in half year losses to £114.1m ($210m) after securing a life-saving £800m ($1.5b) debt-for-equity swap in December.

Under FSA rules, companies must disclose any relevant information that would affect the share price if it was made public.