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BGC admits "material weakness" in reporting ahead of IPO

Interdealer broker BGC has admitted a "material weakness" in its internal accounting, which it says could put it in breach of the US Sarbanes-Oxley Act after it lists its shares later this year.

In a filing with the Securities and Exchange Commission, BGC warned potential investors that its "internal controls over financial reporting do not currently meet all the standards required by Section 404 of the Sarbanes-Oxley Act".

The company lacks suitable controls for the monthly closing process, uses several different methods to keep its accounts and does not have adequately-qualified staff, BGC said, warning that its accounts could contain "material misstatements" as a result.

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