JJB Sports has been fined £445,000 ($609,000) by the the U.K.'s Financial Services Authority (FSA) for misleading the market over the true cost of two acquisitions.

The FSA said JJB had initially announced the acquisition of Original Shoe Company (OSC) on
Dec. 18, 2007 for £5 million in cash but it failed to disclose that
in addition to the cash price, it had had to pay for in-store stock
worth more than £10 million.

On May 22 2008, JJB announced the purchase of another retail chain, Qubefootwear (Qube), for £1 million in cash but failed to disclose that it had made an
agreement  to settle Qube's overdraft prior to completion of the deal.
That amounted to a further £6.47 million.

The FSA ruled that in both cases the full cost of the deals were inside information that should have been disclosed to the market and it was not until Sept. 26, 2008 that JJB disclosed the full cost of the two deals in its interim results.                                

On that day, JJB's share price fell by 49.5% from 104p to 52p after it admitted it had had to take out a bridging loan to shore up its balance sheet.

Alexander Justham, FSA director of markets said: “JJB's failure to disclose information about the two acquisitions denied investors the ability to fully understand its financial position and make informed investment decisions. The repeated failure to disclose this information showed a lack of regard for the market, the disclosure rules and investors.”