Engineering firm Lamprell has been fined £2.4m by the Financial Services Authority (FSA) over 'significant failings' in its systems and controls which meant the listed company was unable to warn the market quickly enough about its deteriorating financial position.

As a result, Lamprell was in breach of the listing principles, the disclosure and transparency rules and also the model code on directors' dealings in securities, the FSA said.

The resulting fine is the first imposed for breaches of this kind under the FSA's new penalty policy, which is linked to a company's market capitalisation and is significantly higher than in the past.

The FSA investigation found that Lamprell's financial performance against its budget had been deteriorating from early 2012, but it made a number of announcements which were generally positive. The oil services firm, which is based in the United Arab Emirates, did not release a trading update to the market until 16 May 2012, when the share price dropped by 57%.

The regulator said Lamprell was also too slow in acting to prevent its employees from continuing to deal in its shares once the inside information regarding poor financial performance had been recognised by senior management, although there was no suggestion they were trading based on inside information.

Tracey McDermott, FSA director of enforcement and financial crime said: 'Lamprell's systems and controls may have been adequate at an earlier stage, but failed to keep pace with its growth. As a result they were seriously deficient for a listed company of its size and complexity, meaning it was unable to update the market on crucial financial information in a timely manner.'