GAM International Management fined £9.1m by FCA

The Financial Conduct Authority (FCA) has fined GAM International Management (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 GIML former investment director and business unit head, Timothy Haywood, £230,037.

According to the regulator, GIML failed to manage conflicts of interest arising from three transactions, two of which were linked to Greensill Capital (UK) Ltd, where Haywood was the investment manager making investment decisions.

The FCA noted that potential incentives were offered that would have provided benefits to GIML or its parent company, explaining that whilst these were not taken up, they were not dealt with properly by GIML and conflict of interest policies were not followed.

Haywood also received gifts and entertainment valued at £22,437, including travelling on a Greensill private aircraft, but failed to record them in a timely manner with GIML.

Whilst the FCA clarified that it did not find evidence that Mr Haywood made investment decisions because of these gifts, it suggested that 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 Haywood agreed to resolve the cases against them at an early stage of the FCA’s investigation, however, and therefore qualified for a 30 per cent discount.

FCA executive director of enforcement and market oversight, Mark Steward, commented: “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.”

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