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Bailey McCann, Opalesque New York: Great Britain's Financial Conduct Authority has fined hedge fund BlueCrest Capital £40 million for conflict of interest issues.
According to the regulator, between October 2011 and December 2015, BlueCrest failed to
manage conflicts of interest after changing portfolio managers in a fund that was open to outside investors. That portfolio manager went to a fund that was only open to BlueCrest partners. The FCA argues that the move led to "substandard" service to outside investors.
In addition to the fine, BlueCrest will have to work with outside investors that suffered losses on a redress plan.
This is the second fine for BlueCrest over the switch. In December of last year, the SEC fined the firm $170 million to settle charges arising from inadequate disclosures, material misstatements, and misleading omissions concerning its transfer of top traders.
According to the SEC's order, BlueCrest failed to disclose that it reallocated the transferred traders' capital allocations in the fund to a semi-systematic trading system, which was essentially a replication algorithm that tracked certain trading activity of a subset of BlueCrest's live traders. The algorithm generated significantly less profit with greater...................... To view our full article Click here
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