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Asset manager hits back at FCA fine

An asset manager has hit back at its fine from the FCA this morning over alleged price-fixing in initial public offerings and share placings.

This morning, the FCA announced that, for the first time, it had used its new competition enforcement powers to fine Hargreave Hale and River and Mercantile for their role in sharing strategic information between competing asset managers before share prices were set.

The FCA said that the sharing of confidential information undermined the fair market for shares.

FCA fines asset managers for breaching competition law

A statement from Hargreaves Hale parent company Canaccord Genuity Group sent to Money Marketing says that the firm is now taking legal advice, maintaining that it did not breach competition law.

The statement reads: “Based on our initial review of the FCA’s decision in connection with its Competition Act investigation, we believe that the FCA has made a number of legal and factual errors in concluding that Hargreave Hale infringed competition law and we are exploring our options with our legal advisers. In particular, Hargreave Hale was simply a recipient of information that was provided on an unsolicited basis by another fund manager and did not alter its own bidding behaviour as a result.

“We have co-operated fully with the FCA throughout its investigation and have provided comprehensive evidence and arguments to support our view that no infringement involving Hargreave Hale occurred.”
Newton Investment Management Limited escaped a fine under a leniency clause in the Competition Act allowing the FCA to reduce fees in return for help with investigations.
Hargreaves Hale was fined £306,300 compared to £108,600 for River and Mercantile.
The Canaccord statement says: “We note that none of the individuals representing our organisation has been investigated by the FCA and we remain confident that Hargreave Hale employees conducted themselves professionally and in the best interests of clients. We would add that the FCA used the same criteria in calculating financial penalties for all parties. The different penalty level reflects Hargreave Hale’s higher turnover in the relevant market.”

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