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: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

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

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

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.