Britain’s financial watchdog this morning said it has fined Swiss asset management group GAM International £9.1m, as well as its former fund manager Tim Haywood, for conflicts of interest and gifts and entertainment matters.
Following its investigation into the asset manager, the regulator concluded that GAM “failed to conduct its business with due care, skill and diligence”, and in particular failed to have systems in place to prevent conflicts of interest between November 2014 and October 2017.
The Financial Conduct Authority (FCA) also concluded that between October 2016 and March 2018, GAM failed to manage conflicts of interest relating to three specific investments made by the absolute return unit that Haywood headed up at the time.
Haywood, the former head of GAM’s absolute return bond fund unit, has also been fined £230,037 by the Financial Conduct Authority (FCA).
The regulator launched its investigation after receiving allegations concerning Haywood and his large-scale purchases of bonds tied to metals tycoon Sanjeev Gupta, which resulted in huge amounts of debt for the firm, as well as his close ties to the scandal embroiled Greensill Capital.
Haywood was sacked by the GAM in 2019 for “gross misconduct” following an internal investigation. At the time, GAM said “there was serious failure to achieve the standard of skill and care which were to be expected of someone in his position”.
GAM’s share price plummeted that year following the closure of the fund Haywood had used to buy bonds with connections to the collapsed supply chain finance firm Greensill Capital.
Both GAM and Haywood originally faced heftier financial penalties of £13m and £319,044 respectively, but were granted a 30 per cent discount when they agreed to resolve all issue of fact and liability in the case.