An undercover investigation by the FBI was behind a delay in the FCA’s decision to shut down London-based discretionary fund manager Beaufort Securities, according to reports.
The FCA postponed action as far back as December against Beaufort to allow US authorities to finish gathering evidence, the Times says.
The UK watchdog was considering forcing the £800m DFM to cease trading several months ago, according to the paper, but only revealed an indictment in New York against the firm that was unsealed last Friday.
The FCA previously put a number of restrictions on Beaufort’s business last September, however, including banning it from taking on new money.
Speaking to the Times, FCA director of enforcement Mark Steward says that the FCA and US authorities had coordinated their investigations.
He says: “I won’t go specifically into what we were looking at because our investigations are ongoing, but clearly once we realised we had issues with the same firm we started a dialogue.”
Beaufort was placed into insolvency last Friday after the FCA applied to the High Court for a wind-down order. The regulator then revealed the list of charges against the firm and connected individuals from US authorities.
These include allegations that Beaufort “engaged in an elaborate multi-year scheme to defraud the investing public of millions of dollars through deceit and manipulative stock trading, and then worked to launder the fraudulent proceeds through off-shore bank accounts and the art world”.
An undercover agent was allegedly told to purchase a Pablo Picasso painting to help launder money.