Evolution faces £400,000 fine

BROKER Evolution Beeson Gregory is on the point of being fined £400,000 by the Financial Services Authority for its role in a shares scandal involving Aim-listed Room Service.

The FSA may impose a further £100,000 fine on a senior employee of Evolution.

Evolution, which denies any wrongdoing, is also among up to eight City firms being sued by shareholders in delivery firm Room Service, now renamed Azure Holdings.

The regulator launched an investigation in December after Room Service's shares were suspended following the collapse of a rights issue to cut debts of £219,000.

The suspension meant Evolution-was unable to close its positions, and it became clear that market makers had sold twice as many shares in Room Service as existed, leaving many small shareholders out of pocket.

Shareholders last year rejected a £140,000 settlement from market makers involved in the scandal, dismissing it as 'derisory'.

Evolution declined to comment.