FSA Bans Former Dynamic Decisions Compliance Officer

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.


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.