Bermuda firm Barrington Investments has been slapped with a $50,000 fine by the Bermuda Monetary Authority for regulatory breaches.

And the financial services regulator has restricted the company from taking on additional business until it gets its house in order.

The fine came after a February routine probe into the business, based in Hamilton’s Queen Street, under the Investment Business Act 2003.

A spokesman for the BMA said: “Exercising its powers under the Act, the authority found that Barrington was in breach of the minimum criteria for licensing under the act in three key areas — corporate governance, conducting business in a prudent manner and risk management.

“The breaches included a failure to have in place governance and management structures appropriate to the business, a failure to have proper operational policies and procedures in place, a lack of a formalised internal control network and a failure to have a proper risk management function.”

The restrictions on accepting new business, or publicly advertising for new business, will remain in place until Barrington, headed by David Pugh, interim managing director and former Argus chief financial officer, who stepped down from that post last September, but remained with the firm until June, is “fully compliant with all its obligations under the Investment Business Act 2003”.

David Cooper, director of Barrington, said: “We understand that this has arisen from their determination that there has been a failure by Barrington to comply with all of the obligations imposed by the Investment Business Act — much of which concerns corporate governance and the appropriate number of directors required to conduct investment business.

“We wish to stress that no client assets are affected. Barrington Investments upholds strict policies regarding the segregation of client assets; all clients’ accounts are registered in their own name and held directly with our clearing agent.

“As many of our clients are aware, Curtis Begg, Barrington’s managing director for many years, fell ill some months ago and, as a result, was increasingly unable to provide the day-to-day leadership and senior management oversight required under the Investment Business Act.

“To assist in this area, we have recently appointed David Pugh as managing director. David has well over 30 years of senior management experience in financial services and is working closely with management and staff on a daily basis.

“The entire Barrington team has worked diligently in recent months to update and document policies and procedures to improve corporate governance, operational compliance and risk management.

“We hired Oyster Consulting, a regulatory and compliance consulting firm, to assist us in this matter. We believe that all required documents have now been submitted to the Authority.

“While we are disappointed to note the restrictions imposed upon our licence, we look forward to working with the Authority to satisfy them that Barrington is fully compliant with its obligations under the Act.”

Mr Pugh, who took over at the firm in July, said that it would take four to six weeks before the firm was happy it would pass a follow-up inspection from the BMA.

He added: “It’s a bump in the road now, because we have done an enormous amount of work, both the Barrington team and myself complementing that and using Oyster Consulting.

“We think we have done everything possible we can to remediate and work with the BMA to have the restrictions lifted as soon as possible.”

Mr Cooper said: “We advised the Authority before their visit there were things that weren’t up to where they should be — we couldn’t get them in soon enough as far as I am concerned.”

Mr Pugh added that — while clients of the firm had been “very supportive and expressed confidence in the corporation”, the temporary ban on new clients would affect the business.

He said: “We will feel the pinch there. That’s why we’re anxious to get this cleared up as soon as we can.”

The BMA announced earlier this year that the Authority would start to publish the use of its enforcement power after the expiry of the 28-day appeal window. Barrington did not appeal the decision.

Previously, the BMA only published brief details in its annual report.