FSA to look at profit warnings

The markets regulator is to investigate whether investors were given enough advance warning of profit slumps

Companies will come under the spotlight of the Financial Services Authority for disclosures in the lead-up to profit warnings.

The regulator is investigating whether investors were kept up to speed about the financial health of companies before the profit warnings were issued, the FT reported.

More than 40 FTSE 250 companies saw their share price decrease by more than 10% or more after profit warnings were issued according to research by Ernst & Young.

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