The UK Financial Conduct Authority (FCA) has secured $101 million in redress to UK and other non-US investors in a fund sub-managed by BlueCrest Capital Management (UK) LLP and imposed a public censure.
Between October 2011 and December 2015, BlueCrest failed to manage fairly a conflict of interest created by its role in managing both an investment fund exclusively for the benefit of its partners and employees and a flagship fund available to external investors.
BlueCrest’s management approved UK-based traders being moved from the external fund to work on the internal fund, in which they were personally invested and where they stood to benefit personally from those decisions.
Disclosures to investors were insufficient and, at times, misleading. Investors were not told that a significant number of traders were moved to work on the internal fund. This affected investors’ ability to make informed decisions.
The firm’s failure to manage fairly the conflict led to a sub-standard service for the external fund and its investors.
Asset managers are trusted to make decisions for their clients. It is vital they have appropriate systems and controls in place to ensure conflicts of interest are managed fairly.
The redress scheme will be overseen by BlueCrest. Affected investors will be contacted on next steps by BlueCrest or a scheme administrator if it chooses to appoint one.
