London Stock Exchange Fines Regal for False Well Updates

17 November 2009 (Last Updated November 17th, 2009 18:30)

Regal Petroleum has been issued a £600,000 fine by the London Stock Exchange (LSE) for holding back information on projects it holds in the North Aegean Sea. The LSE said the company went against its Alternative Investment Market (Aim) Rules for Companies between 27 June 2003 and 19 May

Regal Petroleum has been issued a £600,000 fine by the London Stock Exchange (LSE) for holding back information on projects it holds in the North Aegean Sea.

The LSE said the company went against its Alternative Investment Market (Aim) Rules for Companies between 27 June 2003 and 19 May 2005.

It alleges that on 11 occasions Regal did not make efforts to ensure announcements were not false or misleading, and did not omit material information, while on two occasions the company failed to issue price-sensitive information on time.

In 2003, Regal alleged that the oil wells in its Kallirachi project in the North Aegean Sea could hold a maximum of 227 million barrels of oil.

In May 2005, however, Regal was compelled to confess that the well, which generated only 30 barrels of oil a day, was not commercially viable.

The LSE said the company delayed revealing the bad news to investors.

"The number, nature and duration of the breaches demonstrate a systemic pattern of conduct, evidencing a reckless disregard for the Aim rules by Regal," the LSE said.

The LSE's head of exchange Nick Bayley said the public censure and fine closes an exceptional case, which is the biggest fine in Aim's history.

"It is unprecedented in terms of the seriousness of the rule breaches involved and the resultant market impact," Bayley said.

"Today's action demonstrates that the exchange takes the accurate and timely disclosure of price-sensitive information by quoted companies very seriously."