FCA reaches £9 million settlement with global asset management firm

On December 16, 2021, the UK Financial Conduct Authority announced the settlement of investigations into conflicts of interest and gifts and entertainment matters by GAM International Management Limited and its employee Timothy Haywood.  The settlements were announced by means of Warning Notices, in advance of Final Notices, which will be issued by the FCA when it is able to publish more details about the matter.

The investigations focused on three specific investments made by the company’s Absolute Return and Long Only team between October 2016 and March 2018; however, breaches were found to have occurred from 2014 onward.  Beginning in November of that year, according to the FCA, GAM failed to conduct its business with due care and diligence sufficient to ensure effective operation of its systems and controls for the prevention and management of conflicts of interest, thereby breaching Principle 2 of the FCA’s Principles for Business.  The FCA’s notice also points to GAM’s breach of Principle 8, by the company’s failure to manage conflicts of interest appropriately.

In its notice regarding Haywood, whose function at GAM had accountable significant-influence within the meaning of the FCA’s Principles for Business, the FCA found a breach of Statement of Principle 7 in Haywood’s failure to take reasonable steps to ensure compliance with applicable regulatory rules governing the management of conflicts of interest.  In addition, the FCA determined that Haywood had breached Statement of Principle 2 when he failed, between March 2017 and January 2018, to comply with his employer’s gifts and entertainment policy.

The settlements require GAM to pay a £9.1 million penalty, and Haywood to pay a financial penalty of £230,037.   Both penalty amounts reflect a 30 percent discount for full cooperation, remedial measures taken, and agreement by GAM and Haywood to resolve all issues of fact and liability relating to the investigation. 

FCA press release | Warning Notice (GAM) | Warning Notice (Haywood) 

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