The chief executive of Swiss asset manager GAM referred to whistle-blowers as “brave” as more details emerged about the firm’s investigation that led to the suspension of an absolute return bond fund.
GAM said the internal investigation into the conduct of Tim Haywood, investment director of the ARBF funds, started following concerns raised by an internal whistle-blower.
GAM launched an internal investigation in November 2017 supported by independent external counsel and in March 2018, the whistle-blower expanded on the initial concerns and contacted the Financial Conduct Authority while keeping the company informed.
The internal investigation “evolved as more facts and circumstances were uncovered” and identified a number of potential misconduct issues, which all led to Haywood’s suspension.
GAM, which said it had released more information due to media speculation, said no other employees were being investigated and that the firm had, and would, protect the whistle-blower.
Alexander Friedman, GAM Group chief executive, said: “At the heart of every modern financial services firm’s systems and controls should be a culture that encourages people to come forward with concerns about colleagues’ behaviour.
“The only way to maintain that culture is to protect those who are brave enough to do so and to hold accountable those found to be breaking the rules. This is central to trusted client relationships and we will never compromise on this point.”
As previously reported, the potential conduct issues relating to Haywood related to “failure to conduct or evidence sufficient due diligence and failure to make accessible internal records of documents in certain instances”.
Additionally, the investigation concluded that Haywood may have breached the company’s signatory policy and may have used his personal email for work purposes. He also breached the company’s gifts and entertainment policy.
The firm recently began liquidation of the ARBF funds and said between 60% and 87% of the funds had been returned to date.
The second liquidation payments will start in the week of September 24 and no “material client detriment” has been identified to date.
Friedman added: “I’m grateful to every one of our clients that has taken the time to understand our approach to these issues and we continue to work tirelessly in their best interests.”
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