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FSA bans and fines hedge fund manager for ‘mis-marking’

The Financial Services Authority has banned a London-based hedge fund manager and fined him £140,000 for deceiving investors by mis-marketing funds he managed.

Simon Treacher, a senior fund manager at BlueBay Asset Management, was also found to be misleading the FSA during an investigation.

Between August and October 2008, Treacher, who worked in the firm’s emerging markets team, was found to be cutting and pasting different figures onto seven original broker quotes used in the valuation process of assets in the funds he managed. These altered quotes led to an uplift of £16.9bn in the independent valuation of the funds over three months.

This led to investors being disadvantaged by around £406,000 in that period. BlueBay has now compensated investors for the loss.

Treacher no longer works at BlueBay and the FSA says BlueBay has no role in the investigation.

FSA director of enforcement and financial crime Margaret Cole says: “Our actions in banning Simon Treacher and imposing a significant fine will send a powerful message of deterrence to others who might be tempted to behave in this way.  His conduct, both in mis-marking the funds and his dealings with us as the regulator, lacked integrity.  Treacher’s actions undermined BlueBay’s independent valuation process and disadvantaged investors in the affected funds. By making effective use of our powers to prohibit and fine individuals who are not fit and proper to carry out regulated activities, we help achieve our regulatory objectives of maintaining market confidence and protecting consumers.”

Treacher settled his case at an early stage and qualified for a 30 per cent discount meaning the fine was cut from £200,000.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. I thought that was how hedge funds worked!

  2. Isn’t it funny to hear the FSA talk about integrity and their judgement of “fit and proper?”

    Now, what was that about those in glass houses….?

  3. Is this justice?

    Armed robbers steal less as do burglars than this man would probably have pocketed and yet, any other individual committing what appears fraud at the least and pretty near to what I’d view as theft, would have a criminal conviction. Whilst he may well have been banned from regulated activities and fined, this is NOT a criminal conviction. so in short my question stands, is this justice? Is it proportionate to what would happen to other offenders?

  4. I thought that was how hedge funds worked!

  5. Incompetent Regulators Awards Team 3rd February 2010 at 3:55 pm

    Well done FSA, keep up the good work. Now let me tell you sa little secret that not many people know. You may want to just take a little look at the banks you may find something going on there too………………

  6. This is very worrying- what if this Master of the Universe should decide to leave Great Britain and take his talents abroad as so many have threatened to do? My goodness, just imagine how the banks and investment houses of Frankfurt, Geneva, and New York would love to acquire such talent for cutting and pasting ! Well done brave and fearless FSA, we shake our heads in admiration for you- well, no, we just shake our heads!

  7. Interesting. The above is fraud, a criminal offence, and should have been dealt with the by the Courts.
    So the FSA have now taken over totally from the Courts; they also deal with database problems, taking over from the Data Protection Authority; they tell the industry how it shall build its business model, taking over from the Department of Trade and the Office of Fair Trading.
    Presumably they will soon be sorting out parking tickets.
    Give them another couple of years and I’m sure they will be telling the Treasury how to run the country. That may be an accidental improvement!

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