The Financial Conduct Authority (FCA) has fined asset manager GAM International Management Limited (GIML) £9,103,523 for failing to conduct its business with due care and attention and failing to adequately manage conflicts of interest. The FCA has also fined Timothy Haywood, a former Investment Director and Business Unit Head at GIML, £230,037.
GIML failed to manage conflicts of interest arising from three transactions, two of which were linked to Greensill Capital (UK) Ltd where Mr Haywood was the investment manager making investment decisions. Potential incentives were offered which would have provided benefits to GIML or its parent company. Although these were not taken up, they were not dealt with properly by GIML.
Conflict of interest policies were not followed and as a result any potential conflicts were not considered by those who should have been responsible for doing so.
Mr Haywood received gifts and entertainment, including travelling on a Greensill private aircraft, but failed to record them in a timely manner with GIML. Although the FCA did not find evidence that Mr Haywood made investment decisions because of these gifts and entertainment, the fact that conflicts were not properly managed heightened the risk that he may have been incentivised to invest for personal interest.
Both GIML and Mr Haywood agreed to resolve the cases against them at an early stage of the FCA’s investigation and therefore qualified for a 30% discount. Mr Haywood’s fine includes the £22,437 of the value of the gifts and entertainment he did not record in a timely manner.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said: ‘A robust framework, properly implemented and followed by all staff, is required to manage any conflicts of interest. GIML failed to do this. In an asset manager, this is vital in ensuring decisions are taken for the benefit of the investors. Mr Haywood’s disclosure failings are equally serious ones. … ‘The FCA expects asset managers and their staff to be scrupulous in identifying and managing conflicts and their risks. This case should send a clear warning to the market.’
- The final notice for GIML can be seen here and Timothy Haywood here.
- GIML and Mr Haywood agreed to resolve this matter in December 2021, and warning notice statements were issued. Third parties then had the opportunity to make representations about this matter. This process has been completed and the FCA is now able to issue Final Notices.
- The FCA’s findings relate to the period 28 November 2014 to 8 March 2018 for GIML, and 20 October 2016 to 8 January 2018 for Mr Haywood.
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