FCA wins appeal in BlueCrest “conflicts of interest failings” case.
05/10/2024
The Court of Appeal has upheld the FCA’s power to require redress from firms.
In December 2021 the FCA announced that it planned to fine BlueCrest Capital Management (UK) LLP for conflicts of interest failings and impose a requirement on the firm to pay redress to clients.
The FCA has published a Decision Notice against BlueCrest Capital Management (UK) LLP (BCMUK - BlueCrest) setting out its decision to impose a financial penalty of £40,806,700 on the firm.
- 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.
- 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.
- 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
- https://www.fca.org.uk/news/press-releases/fca-publishes-decision-notice-hedge-fund-conflicts-interest-failings
BlueCrest referred the case to the Upper Tribunal, which ruled that the FCA did not have the power to impose a redress requirement. The Tribunal also decided that it was unable to consider certain new allegations and issues the FCA had sought to introduce into the Tribunal proceedings in response to arguments BlueCrest had put forward as part of their defence.
The FCA’s appeal against the Tribunal’s decision has been successful. This has important wider implications both for the FCA’s ability to secure redress for consumers and its ability to conduct litigation before the Upper Tribunal effectively.
The Court of Appeal’s decision has been made at an early stage of the Tribunal proceedings, and subject to any further appeal, the matter will now proceed to a full hearing.
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As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[www.gov.UK/government/publications/copyright-acts-and-related-laws]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here www.gov.uk/guidance/exceptions-to-copyright]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email info@comsuregroup.com.