FCA fines BlueCrest Capital for conflicts of interest failings

The FCA has published a Decision Notice against BlueCrest Capital Management (UK) LLP (BlueCrest), setting out its decision to impose a £40,806,700 fine on the hedge fund.

The FCA considers that BlueCrest failed to fairly manage a conflict of interest between 1 October 2011 and 31 December 2015. The FCA explains that the conflict of interest was created by allocating portfolio managers who were working on an external fund (open to investors outside BlueCrest) to an internal fund which was only open to its partners and employees. The FCA found that BlueCrest’s systems and controls didn’t adequately manage the risk that portfolio managers could be allocated in a way that favoured investors in the internal fund over those in the external fund. The FCA considers that this failure 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 because BlueCrest has not yet made any representations.

BlueCrest has chosen to refer the case directly to the Upper Tribunal.

Emma Bond