Sat, Apr 25, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

UK FSA’s ban of Michiel Visser shows that investors should look at all components of hedge fund firms, not just track records

Tuesday, August 16, 2011

Peter Moore
Opalesque Industry Update - Peter Moore, head of regulation at The IMS Group, comments on how the FSA’s significant fine and banning for life of hedge fund manager Michiel Visser highlights the age-old need for independence between key functions at firms of all sizes

"The news that the FSA has struck off and fined Michiel Weiger Visser, CEO of failed Mercurius Capital Management, highlights how potential investors should consider the quality of all the components of an asset management firm and not simply the experience and track record of the front office (investment) staff. Potential investors should seek assurance (and supporting evidence) of the independence of all the firm’s functions. Specifically, they should look for quality and depth across the whole firm.

"This case reveals how badly things can go wrong with a single senior executive omnipresent across the activities of the entire firm. Segregation between such functions is essential to ensure and preserve integrity in their performance. It’s also required under the FSA’s rules for senior management. This case should not be taken as evidence that hedge fund managers are comparatively more susceptible to this kind of behaviour, described by the Tribunal as the worst to come before it. This was a spectacular failure by a financial services firm to construct itself properly, likely from the outset. The required quality in systems and controls will be achievable at firms of all sizes if there is a desire to achieve this standard by senior management. Furthermore, investors in funds are likely to increasingly insist on it."


Michiel Weiger Visser, CEO of Mercurius Capital Management, was fined £2m and struck off by the FSA following a tribunal ruling that found that Michiel and his CFO, Oluwole Modupe Fagbulu, were guilty of lying to investors, manipulating the valuation of the fund and share ramping. The CFO was fined £100,000.

(press release)

The IMS Group is a market leading provider of regulatory compliance consulting and integrated business support to the asset management and securities industry. www.theimsgroup.co.uk

Bg

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. U.S. does not want hedge funds to invest in offshore re-insurers for tax purposes[more]

    Komfie Manalo, Opalesque Asia: The U.S. Treasury Department on Thursday introduced a new rule aimed at limiting hedge funds’ ability to reduce their tax bills by investing in insurance companies in offshore tax havens. As a general rule, the U.S. tax laws does not allow hedge funds to use off

  2. Ruling: Hedge funds suing Argentina can have access to bond offering details[more]

    Komfie Manalo, Opalesque Asia: U.S. District Judge Thomas Griesa in Manhattan ruled yesterday that hedge funds are entitled to details of a recent bond offering by Buenos Aires, reports

  3. Hedge funds looking to continue their rally in Q2[more]

    Komfie Manalo, Opalesque Asia: Hedge funds finished the first quarter on a strong note and are looking to continue the rally in the second quarter, said Lyxor Asset Management in its Weekly Brief. The Lyxor Hedge Fund Index is up 0.4% over the week

  4. Hedge funds down -0.17% in March (+1.23%YTD)[more]

    Bailey McCann, Opalesque New York: The hedge fund industry produced an aggregate return of –0.17% in March to end Q1 2015 up 1.23%, compared to the S&P 500 which increased 0.96%, according to the latest data from eVestment. Hedge fund performance returns were mixed in March amid increased equity

  5. Fund managers express concern of overvaluation in both equity and bond markets[more]

    Komfie Manalo, Opalesque Asia: According to the BofA Merrill Lynch Fund Manager Survey, investors see growing overvaluations in both

 

banner