Thursday, 25 August 2016
Last updated 15 hours ago
Nov 22 2011 | 9:26am ET
The Financial Services Authority, the UK’s market regulator, has banned and fined Sandradee Joseph, the former compliance officer at hedge fund Dynamic Decisions Capital Management, for failing to investigate investor and broker concerns.
Joseph must pay £14,000 and is banned from performing any significant role in regulated financial services, according to an FSA statement.
The case stems from the investment strategy adopted by the London and Milan-based DDCM following the collapse of Lehman Brothers. According to the FSA, the strategy resulted in losses totaling approximately 85% of the fund’s total assets under management. To conceal the losses, in late 2008, a senior employee at DDCM entered into a number of contracts, on behalf of investment funds managed by DDCM, for the purchase and resale of a bond.
At the time, says the regulator, investors raised concerns that the bond was “of doubtful provenance and legitimacy,” and DDCM’s prime broker resigned as a result of its concerns. But Joseph, says the FSA, “failed to consider the reasons for the prime broker resigning and despite being aware of the investors´ concerns about the bond she failed to properly investigate those concerns or act upon the information.”
Said Tracey McDermott, acting director of enforcement and financial crime, in a statement:
''Joseph took far too narrow a view of her role as a compliance officer. 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, which resulted in a 30% of her financial penalty, which would normally have been £20,000.