FCA imposes £40.8M fine on BlueCrest Capital Management

The UK Financial Conduct Authority (FCA) has published a Decision Notice against BlueCrest Capital Management (UK) LLP (BCMUK) setting out its decision to impose a financial penalty of £40,806,700 on the firm.

BCMUK has elected to refer the case directly to the Upper Tribunal which will determine the appropriate action, if any, for the FCA to take.

The FCA considers that, between 1 October 2011 and 31 December 2015, BCMUK failed to manage fairly a conflict of interest created by allocating portfolio managers working on an external fund, open to investors outside BlueCrest, to an internal fund, open only to its partners and employees.

The regulator found that BCMUK’s systems and controls did not manage the risk that portfolio managers could be allocated in a way that favoured investors in the internal fund over those of the external fund. This resulted in a sub-standard investment management service being provided to the external fund and its investors.

The findings in the Decision Notice are provisional and only reflect the FCA’s views at this stage since BCMUK has yet to make representations.

The regulator has also decided to impose a requirement on BCMUK to pay redress to clients who have suffered loss as a result of its failings. This decision has also been referred by BCMUK to the Tribunal for determination.

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