The FSA has fined London-based investment bank and stockbroker Seymour Pierce Limited £154,000 for failing to detect employee fraud carried out over three years.
Seymour Pierce failed to notice the theft of about £150,000 from the firm's internal and private client accounts in 36 separate transactions.
The illegal activity was only discovered by chance when the employee involved left and his replacement noticed serious accounting discrepancies.
Several of the illegal transactions involved hijacking existing accounts to make unauthorised changes to clients' name, address, bank account and payment instructions on existing accounts.
The employee also took advantage of dormant accounts, and in one instance transferred a personal trading loss into one of Seymour Pierce's internal accounts.
Margaret Cole, the FSA's director of enforcement and financial crime, says: "This is a serious failure on Seymour Pierce's part. The frauds were not sophisticated and could have been detected at a much earlier stage if the proper procedures had been in place."
She describes the fine as "a timely reminder" of the consequences for firms which neglect safety procedures.
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