View more on these topics

FSA fines Martin Currie £3.5m

The Financial Services Authority has fined Martin Currie Investment Management and Martin Currie Inc £3.5m for failing to manage a conflict of interest between two of its clients.

The investment firm has also been fined £5.15m by the Securities and Exchanges Commission in the US, bringing the total fine to £8.65m.

The FSA says the firms’ misconduct breached FSA Principle 2 (skill, care and diligence), Principle 3 (management and control) and Principle 8 (conflicts of interest).

The conflict of interest arose when Martin Currie caused one client (Fund B) to enter into an ill-advised transaction which rescued another client (Fund A) from serious liquidity concerns. Both Fund A and Fund B focused on making investments in the China market, and were managed by Martin Currie from its Shanghai office.

The FSA says it is the largest fine it has imposed in a conflict of interest case.

FSA acting director of enforcement and financial crime Tracey McDermott says: “Effective identification and management of potential conflicts of interest between clients is a core requirement for asset managers.

“This transaction gave rise to an obvious risk of a conflict which Martin Currie was slow to identify and then failed to manage adequately.

“It is no excuse that some of Martin Currie’s failings resulted from the actions of individual fund managers.

“The primary responsibility for ensuring compliance with a firm’s regulatory obligations rests with the firm, and senior management must ensure that there are adequate systems and controls in place to manage conflicts and to oversee the actions of employees.

“The action taken by both ourselves and the SEC should leave firms in no doubt about the serious consequences of this type of failure.”

Martin Currie chief executive Willie Watt says: “The issue relates to three unlisted investments that originated back in 2007 in a specialist part of our business.

“We compensated the affected client and returned all related fees earned. Following our comprehensive review, significant improvements have been made to our business including reinforcements to our governance function, changes to our management team and closing the unit down.

“It is good to reach the end of the regulatory process, and put this behind us allowing for the business to move forward.

“The injection of fresh capital in the business means we are financially strong and demonstrates a clear vote of confidence by Martin Currie’s directors and the continued support of our external shareholders.”


Shipman buys Devon HNW specialist firm

IFA firm Shipman Financial Planning has acquired CMC Financial Services. CMC specialises in advising high-net-worth clients in East Devon, around its Budleigh Salterton base, and has over £25m in funds under management. The CMC deal follows Shipman’s acquisition of C&M Financial Services in 2009. The sale was prompted by the retirement of John Pratt, who […]

Abbey chops 140 fast-track users

Abbey for Intermediaries has notified around 140 advisers that they will no longer be able to use its fast-track facility following a review of their business performance. Money Marketing sister publication Mortgage Strategy understands that those affected are equally split between appointed representatives and directly authorised brokers. There were rumours last week that the measure […]


Fixed-term job call as Smith joins FSA executive exodus

The FSA is facing calls to introduce fixed-term appointments for senior employees after head of investment policy Peter Smith became the latest high-profile figure to quit the regulator. Smith (pictured) will leave in June to become director of policy at the Dubai Financial Services Authority. He joined the FSA when it was formed in 2001, […]

UK policy: Kate Moss and short-termism

“Nothing tastes as good as skinny feels,” said supermodel Kate Moss, who is not often credited for her insights into policy making. Perhaps she should be. In politics, as in matters of diet, the course of action that is the best over the long term is often not the most desirable course of action in the short term. Add the instant gratification of the democratic electoral cycle and, instead of good policy making, you sometimes get the equivalent to a midnight binge in front of the fridge.

Read more

Important information

Investment risks

The value of an investment and any income from it can fall as well as rise and you may not get back the amount originally invested. Forecasts and past performance are not a guide to future performance. Some information and statistical data herein has been obtained from sources we believe to be reliable but in no way are warranted by us as to their accuracy or completeness. These are Neptune’s views and as such this document is deemed to be impartial research. We do not undertake to advise you of any change to our views.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm