Financial advice firm RSM Tenon will receive a £5.5m payout after an arbitrator ruled its insurers should pay the costs of disputing a Financial Services Authority fine from 2010.
Last year, the Financial Services Authority fined the company £700,000 for failures in its advice and sales processes involving structured products backed by Lehman Brothers.
However, a dispute arose between the firm and its insurers over whether the fine was covered by RSM Tenon’s professional indemnity insurance, which was eventually referred for resolution by confidential arbitrage.
The arbitrator has now ruled that RSM Tenon should receive £5.5m reimbursing costs resulting from the fine, which the company has said will result in exceptional profit for 2013 of about £2.8m.
It added that it expects to receive further reimbursement for the costs of arbitration.
Chris Merry, chief executive of RSM Tenon, said: “We continue to make good progress in restoring RSM Tenon to operating profitability and to consolidate the business turnaround. The market for our services remains highly competitive and I am grateful to our clients and staff for their continued support.”
