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Hedge fund manager banned and fined GBP 140k for 'mis-marking'

Thursday 4th February 2010
By Mike Jones

The Financial Services Authority (FSA) has banned a London based hedge fund manager and fined him £140,000 for deceiving investors by mis-marking funds he managed and misleading the FSA during the investigation.

Simon Treacher was an FSA approved person employed by BlueBay Asset Management plc (BlueBay) as a senior fund manager in the firm's Emerging Markets team.

During the period August to October 2008 he carefully cut out and pasted different figures onto seven original broker quotes used in the valuation process of assets in the funds he managed.

The deliberately altered quotes led to an uplift in the independent valuation of the funds of approximately US $27million over three months. This resulted in investors being financially disadvantaged by approximately US $650,000 for which BlueBay has fully compensated them. Treacher then provided misleading information to the FSA about his conduct during its investigation.

Margaret Cole, FSA director of enforcement and financial crime, said: "Our actions in banning Simon Treacher and imposing a significant fine will send a powerful message of deterrence to others who might be tempted to behave in this way. His conduct, both in mis-marking the funds and his dealings with us as the regulator, lacked integrity.

"Treacher's actions undermined BlueBay's independent valuation process and disadvantaged investors in the affected funds. By making effective use of our powers to prohibit and fine individuals who are not fit and proper to carry out regulated activities, we help achieve our regulatory objectives of maintaining market confidence and protecting consumers."

Treacher is no longer employed at BlueBay and the FSA makes no criticism of BlueBay in connection with this investigation.

Treacher agreed to settle at an early stage of the FSA's investigation and qualified for a 30% reduction in the financial penalty. Were it not for this discount, the FSA would have sought to impose on him a financial penalty of £200,000.

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