A firm offering financial advisory services has been hit with costs of £2m and a severe reprimand for failings in advice relating to a pensions fund.

Britain's accountancy watchdog has issued a £750,000 fine to Mazars, which must also pay £1,120,000 for legal and investigation related expenses.

The Financial Reporting Council said Mazars LLP and Richard Karmel, a partner at the firm "admitted that their conduct fell significantly short of the standards reasonably to be expected of a member firm and member".
The formal complaint surrounded the company's advice given to a trustee of the First Quench Pension Fund.
Paul George, FRC executive director of conduct, said: "This outcome sends a clear message to all accountants and accountancy firms carrying out advisory work that not only do they have a responsibility to carry out their professional work diligently and in accordance with the applicable technical standards but that they must consider the different and opposing commercial interests of all those involved.
"Accountants must not allow undue influence of others to override their professional judgements and they must have a clear understanding of who their client actually is.
"The result in this case demonstrates our commitment to ensure the standards of the profession are upheld so that it can justifiably secure public confidence."
The costs were mitigated by a good past compliance and disciplinary record.

A Mazars statement read: "We regret that our conduct fell below our usual high standards in relation to this 2007 advisory assignment. We are pleased that the FRC accepted that the misconduct was neither dishonest nor deliberate, that we took appropriate remedial steps relating to quality assurance, and that it did not cause any actual loss to the beneficiaries of the pension fund."

A settlement was approved by the FRC Tribunal, as outlined below.

• A Fine of £750,000 to be paid by Mazars, adjusted from £850,000 to reflect the admissions made by Mazars (in accordance with paragraphs 57 and 59 of the FRC's Sanctions Guidance);
• Mazars to receive a Severe Reprimand;
• A sum of £1,120,000 to be paid by Mazars as a contribution to the Executive Counsel's costs of, and incidental to, the investigation and the Formal Complaint;
• A Fine of £50,000 to be paid by Mr Karmel, adjusted from £57,000 to reflect the admissions made by Mr Karmel (in accordance with paragraphs 57 and 59 of the FRC's Sanctions Guidance);
• Mr Karmel to receive a Severe Reprimand;
• A sum of £80,000 to be paid by Mr Karmel as a contribution to the Executive Counsel's costs of, and incidental to, the investigation and the Formal Complaint.