Thu, Oct 2, 2014
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   |   

Banner

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. Legal - Court throws out lawsuits related to Fannie Mae, Freddie Mac profits, Insider case by SEC is a step removed from Herbalife itself, SEC grants Citigroup waivers, easing hedge-fund curbs[more]

    Court throws out lawsuits related to Fannie Mae, Freddie Mac profits From WSJ.com: A group of Wall Street investors on Tuesday suffered a blow in their attempts to sue the federal government over their treatment of the shareholders of mortgage finance giants Fannie Mae and Freddie Mac af

  2. Launches - Goldman Sachs Asset Management launches GS Long Short Fund, Western & Southern launching international hedge fund, Lansdowne Partners plans energy hedge fund, RBC Global Asset Management launches new RBC Funds (Lux) - Asia Ex-Japan Fund, PVE Capital latest credit strategy to launch on the Sciens managed account platform[more]

    Goldman Sachs Asset Management launches GS Long Short Fund From Marketwatch.com: Goldman Sachs Asset Management has announced the launch of the Goldman Sachs Long Short Fund, which pursues high conviction investment ideas in global equity markets through a fundamental, bottom-up approach

  3. CalPERS’ move might alter hedge fund fees for good[more]

    Benedicte Gravrand, Opalesque Geneva: When CalPERS, the California Public Employees’ Retirement System, announced on September 15th that it was unwinding its hedge-fund portfolio, it was seen by many as is a significant blow to the sector’s appeal. The Fund is

  4. Opalesque Exclusive: Institutions eye private credit over traditional fixed income[more]

    Bailey McCann, Opalesque New York: Investing in private insurance, realty tax receivables, or investment-grade short-term accounts receivable may not spring to mind as a means of mitigating risk in a portfolio, but one firm, New York-based BroadRiver Asset Management is out to change all that. Th

  5. Short-term trading quant fund beats S&P since '09[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: A relatively new multi-strategy, market-neutral quantitative hedge fund has managed to outperform the S&P500 and the HFRX Global since 2009. New Jersey-ba