The FCA has secured US $101 million in redress for UK and other non-US investors in a fund sub-managed by BlueCrest Capital Management (UK) LLP (BlueCrest) and has issued a public censure.

Between October 2011 and December 2015, BlueCrest failed to manage fairly a conflict of interest that arose from operating two separate funds — one run exclusively for the benefit of its partners and employees, and another open to external investors.

BlueCrest’s management approved the transfer of UK-based traders from the external fund to the internal fund, in which those traders held personal investments and could benefit directly from the fund’s performance.

Disclosures made to investors were inadequate and, in some cases, misleading. Investors were not informed that a significant number of traders had been reassigned to the internal fund. This lack of transparency prevented investors from making fully informed decisions.

As a result, the external fund and its investors received a lower standard of management service than they were entitled to expect.

Asset managers are expected to act in the best interests of their clients and to maintain robust systems and controls to identify and manage conflicts of interest fairly.

Therese Chambers, Joint Executive Director of Enforcement and Market Oversight at the FCA, said:

“This redress scheme brings a positive conclusion to a long-running case. BlueCrest placed its own interests ahead of those of the external fund and delivered a substandard service, which caused harm to investors.

After years of legal challenge, the FCA has now successfully secured a substantial US $101 million for affected investors.”

The redress scheme will be administered by BlueCrest. Affected investors will be contacted directly by BlueCrest, or by a scheme administrator if one is appointed, with further information on the next steps.