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Britain's financial watchdog fines Switzerland's GAM $12 million

By Reuters

LONDON -Swiss asset management group GAM International has been fined 9.1 million pounds ($12.1 million) by Britain’s financial watchdog for conflicts of interest and gifts and entertainment matters, the regulator said on Thursday.

The Financial Conduct Authority (FCA) said GAM failed between 2014 and 2017 to conduct its business with due care and diligence. It also found in particular that the firm failed to manage conflicts of interest made by GAM‘s GIML Absolute Return and Long Only investment teams between 2016 and 2018.

In 2018 GAM suspended – and has since fired – its then star fund manager Tim Haywood for gross misconduct. GAM‘s share price plummeted that year following the closure of Haywood’s fund that had bought bonds with connections to collapsed supply chain finance firm Greensill Capital.

GAM has since liquidated those funds and returned money to investors.

“We fully accept the findings of the FCA and acknowledge the conflicts of interest shortcomings which occurred at the firm between late 2014 and early 2018,” GAM Chief executive Peter Sanderson said in a statement.

“Since then we have significantly strengthened our senior management team, governance, control frameworks, policies and training to ensure that all lessons learned from that period are fully embedded into our firm and culture”.

The FCA also imposed a 230,037 pound fine on Haywood.

“I am truly sorry for the mistakes that I have made and I have learnt a series of very important lessons,” Haywood said in a statement.

“I now look forward to returning to an active role in the industry and will make my plans public in due course.”

($1 = 0.7549 pounds)