GAM has confirmed its internal investigation into the conduct of bond manager Tim Haywood was sparked by an internal whistleblower, in response to media speculation.
Haywood’s suspension comes following concerns raised by the whistleblower and the internal investigation has since evolved and has “uncovered and identified” several potential misconduct issues.
His suspension led to the group liquidating nine unconstrained and absolute return bond funds that were run by the manager.
The internal investigation began in November 2017, supported by independent external counsel. Then in March 2018, the whistleblower expanded their initial concerns and contacted the FCA while keeping GAM informed.
The group’s response states: “The potential conduct issues identified related to failure to conduct or evidence sufficient due diligence and failure to make accessible internal records of documents in certain instances.”
It says: “Additionally, the investigation concluded that Mr Haywood may have breached the company’s signatory policy and may have used his personal email for work purposes. He also breached the company’s gifts and entertainment policy.”
GAM’s chief executive Alexander Friedman says: “At the heart of every modern financial services firm’s systems and controls should be a culture that encourages people to come forward with concerns about colleagues’ behaviour. The only way to maintain that culture is to protect those who are brave enough to do so and to hold accountable those found to be breaking the rules.”
“This is central to trusted client relationships and we will never compromise on this point. I’m grateful to every one of our clients that has taken the time to understand our approach to these issues and we continue to work tirelessly in their best interests.”
Gam says liquidation of the unconstrained/absolute return bond funds is continuing, with between 60 per cent and 87 per cent if the funds returned to date.
The second liquidation payments will started this week, with further fund assets being liquidated to cash and returned to investors over the following months, dependent on market conditions.
It adds: “No material client detriment has been identified to date and we continue to keep this under review.”