The board of Software Circle has confirmed that one of the group’s operating units has been the victim of a suspected authorised push payment fraud.
The incident has resulted in £426,770 being inadvertently sent from the business unit’s bank account.
The Manchester-based firm says that the incident was identified shortly after the transaction was made and immediate action was taken to notify the bank involved and law enforcement.
It is taking the matter ‘extremely seriously’ and has a specialist team within the bank investigating it.
The vertical market software acquirer has no evidence that there has been a wider breach of its systems or data but the news will come as a blow for the business which secured a £16.7m loan facility from Shawbrook just six months ago.
A full internal review is being conducted, and steps have been taken to reinforce awareness of, and strengthen, payment protocols across the group.
Employees will receive additional training and it will introduce stricter multi-level verification procedures and enhanced fraud detection measures.
The company says its financial position remains strong, with a current group cash balance of approximately £7.8m and all business activities will continue as normal.
However, the firm’s share price has dipped slightly since the news, dropping from 29.75p on Wednesday to 27.1p at 08.21 on Thursday morning.
Software Circle, which is led by CEO Gavin Cockerill, currently has a market cap of £113.12m.
It has also said that it will provide further updates to the London Stock Exchange in due course.