INVESTORS in Invesco Perpetual lost £5m because the fund exposed them to more risk through the financial crash than those customers had expected, the City watchdog said yesterday.
The Financial Conduct Authority (FCA) fined the asset manager £18.6m for the failings, which occurred between May 2008 and November 2012.
Invesco broke the rules on 33 occasions across 15 of its funds, the FCA said, which in total represented 70 per cent of the firm’s assets under management.
In some instances Invesco failed to disclose funds’ use of derivatives in its simplified prospectuses given to investors, and incorrectly described the impact of those derivatives.
It also failed to record trades on time, creating a risk that its funds could have been mispriced.
Although investors lost £5m from the failings, the FCA added they could have lost even more given the risks that they faced.
“In this case, investors of all sizes trusted Invesco Perpetual to manage their money,” said the FCA’s enforcement head Tracey McDermott.
“They signed up for a certain level of risk but we found Invesco Perpetual’s actions were at odds with investors’ reasonable expectations.”
Invesco has repaid the investors who lost out.
“The FCA has noted that Invesco Perpetual acted promptly to enhance its systems and controls. We are confident that our systems and controls are now strong, effective and compliant with all applicable regulations,” said Invesco’s chief executive Mark Armour.
“In this instance, we clearly fell short of the high standards we consistently strive to deliver. However, we are pleased that this matter has been fully resolved with the FCA and is now closed.”