ShareSoc Slams London Stock Exchange over AIM Failures

PRESS RELEASE 76 27/4/2016

At today’s AGM of the LSE Group ShareSoc director, Mark Bentley, accused the Group of failing in its function as operator and regulator of the AIM smaller company market.

Representing ShareSoc’s membership, many of whom are experienced investors in AIM quoted companies, Bentley asked:

Why does the LSE not do something about the poor reputation of AIM? This is the result of not just poor performance (or as Claer Barrett said in the FT “20 years of a few winners and many losers”) but also the view of experienced AIM investors: that AIM is full of dubious businesses led by dubious people. Is the new management going to tackle this problem or continue to let it be an ‘anything goes’ market frequented by spivs?

He went on to ask:

Why does the LSE not do something to strengthen the regulation of AIM? I am not talking about introducing more regulations but simply enforcing those that exist. Actually publishing the facts about malefactors would be a good starting point for example because secret justice is no justice. Those who bring AIM into disrepute should be named and shamed.

To his credit, LSE Group Chairman Donald Brydon did not deny the presence of dubious businesses in the AIM market, nor the accusation from well known smallcap market commentator Tom Winnifrith that many frauds had been perpetrated on AIM investors. Mr Brydon did, however, claim that the LSE took these matters seriously and implemented effective regulatory systems.

Mark Bentley said: “The experience of our members has shown that the LSE’s regulatory function is not fit for purpose, which is damaging the ability of legitimate UK SMEs, the lifeblood of the UK economy, to raise much needed capital. Good British businesses, that deserve investment, are tarred in some investors’ eyes with the same brush as the too numerous AIM frauds. We call on the FCA to investigate these regulatory failures and ensure that effective enforcement is in place to deter criminality

For further information, please contact:

Roger Lawson
Deputy Chairman, ShareSoc
Telephone: 020-8295-0378  

3 Comments
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