Financial Conduct Authority secures USD 101m redress scheme and issues public censure over BlueCrest conflicts of interest

The Financial Conduct Authority has required BlueCrest Capital Management (UK) LLP to provide USD 101m in redress to UK and other non-US investors in an external fund it sub-managed, and has imposed a public censure. The action follows findings that, between 1 October 2011 and 31 December 2015, BlueCrest failed to manage fairly a conflict of interest between an internal fund for partners and employees and a flagship fund available to external investors. BlueCrest approved moving UK-based traders from the external fund to the internal fund, where those traders were personally invested and stood to benefit from the decisions. Investor disclosures were insufficient and at times misleading, including failing to disclose that a significant number of traders were moved, which the FCA said affected investors’ ability to make informed decisions and contributed to a sub-standard service for the external fund. The redress requirement is intended to compensate non-US investors who were not eligible under the US Securities and Exchange Commission’s Fair Fund. The scheme covers any person, or their lawful successor, who held shares, units or an interest in the external fund during the relevant period, excluding investors covered by the SEC’s scheme and certain BlueCrest executives. BlueCrest will oversee the scheme and will contact affected investors on next steps, either directly or via a scheme administrator if appointed.