Legal and General Investment Management (LGIM) has been reported to regulators by a whistleblower over allegations of multiple failures in its risk management processes.
At least three employees have reported the fund management house to the Financial Conduct Authority (FCA), the Financial Times reported.
One of the whistleblowers' complaints said the culture of LGIM had become "so toxic that it is reaching a crisis level", with retail and institutional investors' savings put at risk, the report said.
The whistleblowers also made allegations that mistakes by traders within the firm were not reported internally, breaking the company's policies, the FT said.
In a statement an LGIM spokesperson said: “LGIM does not comment on individual performance, disciplinary, or whistleblowing activities. However, we take these issues very seriously, and in the months since these allegations were first made we have been conducting a full investigation using external advisers."
City A.M. understands the allegations were raised around six months ago. LGIM has investigated the claims that the fund house made mistaken trades and has corrected some erroneous trades. Another investigation is ongoing.
The allegations may prove embarrassing for a firm which is often outspoken on matters of corporate governance. For instance, LGIM has repeatedly criticised the management of sports retailer Sports Direct.
The firm hired a Magic Circle law firm to carry out a review of its culture, comparing LGIM to other firms.
"A recent independent external review of LGIM’s culture concluded, overall, that LGIM has a positive, respectful, professional and client-focused culture," the LGIM statement said. "We are proud of the business we have built, but are never complacent and as a result deal seriously with any employee issues raised.”
The FCA declined to comment.