The Financial Services Authority (FSA) has fined the compliance officer of a hedge fund that lost 85% of its value in the wake of the Lehman Brothers collapse.
Dr Sandradee Joseph, who worked for London-based Dynamic Decisions Capital Management, is also banned from performing any significant influence function in regulated financial services.
The FSA said Joseph failed to properly investigate a senior colleague who tried to conceal the losses at the fund by entering into contracts to buy and resell a bond. Investors were concerned the bond was “of doubtful provenance and legitimacy”, said the FSA, and the prime broker to the fund resigned as a result of its concerns.
The FSA said Joseph was aware of investors’ concerns but relied wrongly on another employee and the belief that external lawyers were instructed and were overseeing the actions of the fund.
“Joseph took far too narrow a view of her role as a compliance officer,” said Tracey McDermott, acting director of enforcement and financial crime. “She failed to understand the importance of her role and the wider regulatory obligations it brings.”
Joseph agreed to settle during the course of the FSA investigation and qualified for a 30% reduction on her financial penalty. She has been ordered to pay £14,000 (€16,000).
Dynamic Decisions was founded by Alberto Micalizzi, an Italian university professor, and ran its flagship Dynamic Decisions Growth Premium Master Fund from the Cayman Islands. The Serious Fraud Office opened a criminal investigation into the activities of Dynamic Decisions in late 2009 but discontinued the probe in July the following year.
©2011 funds europe
