By Marc Jones
LONDON (Reuters) – The European Union’s securities watchdog has fined Germany-based credit rating firm Scope Ratings almost 2.2 million euros ($2.4 million) for conflict of interest breaches due to what it described as “structural failures” and “negligence”.
The European Securities and Markets Authority (ESMA) said there had been five separate breaches of its rules by Scope that had led to the fine.
These included “structural shortcomings in Scope’s policies and procedures, internal control mechanisms and organisational and administrative arrangements”.
Two further specific breaches related to Scope’s failure linked to a potential conflict of interest regarding “one particular individual”, and to disclose in a rating report that it was also providing “ancillary services” to the firm being rated.
“All breaches were found to have resulted from negligence on the part of Scope,” ESMA said, adding that in calculating the fine “both aggravating and mitigating factors” had been considered.
In response, a spokesperson for Scope told Reuters the issues raised by the regulator had had “no influence on individual ratings” and that the firm “has rapidly addressed, and completely remediated the issues raised”.
($1 = 0.9244 euros)
(Reporting by Marc Jones; Editing by Mark Potter)
