Emma RadmoreThe FCA has, after many years, secured a redress scheme worth $101m for investors who lost money due to BlueCrest Capital Management (UK) LLP’s failure to manage conflicts of interest that arose when it both managed an investment fund for the sole benefit of its partners and employees and a flagship fund available to external investors. The failings happened between 2011 and 2015, and occurred when traders from the external fund moved to work on the internal fund in which they had invested. Disclosures about the move and the conflict were not sufficient and this led to a sub-standard service for the external fund and its investors.
The FCA’s announcement, and its publication of a Final Notice of a public censure for the firm for breach of Principle 8, follows a long running battle that resulted in the Court of Appeal upholding the FCA’s power to require redress from firms, and BlueCrest recently withdrawing its appeal that had been due for hearing in mid-November. The FCA decided on a public censure as the best way to ensure the most redress possible is available to investors.
The redress scheme covers UK and other non-US investors. The SEC has a separate scheme for US investors. The VREQ containing the FCA’s requirements mandates the method and timings for calculation and payment of the redress.