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Invesco Asset Management fined over £18m by FCA

Thursday 1st May 2014

The Financial Conduct Authority (FCA) has fined Invesco Asset Management Limited and Invesco Fund Managers Limited (Invesco Perpetual) £18,643,000 for exposing investors to greater levels of risk than they had been led to expect.  
Between May 2008 and November 2012, Invesco Perpetual did not comply with investment limits designed to protect consumers by limiting their exposure to risk. The extent of these losses was £5 million and prompt compensation has been paid to the funds. These losses could, however, have been greater.  
In addition, the firm did not clearly inform investors or explain the associated risks of its use of derivatives which introduced leverage into the funds, although the firm was allowed to use derivatives in this way.
The largest investment manager in the UK, Invesco Perpetual acted quickly to improve its systems and controls and to remediate the issues identified by the FCA.  
After agreeing to settle at an early stage, Invesco Perpetual have been handed a fine reduced by 30%, the original fine would have been in excess of £26,632,900.
Tracey McDermott, FCA director of enforcement and financial crime, commented: “As a forward looking regulator, the FCA takes action where we see risks to consumers, not just after they suffer losses. In this case, investors of all sizes trusted Invesco Perpetual to manage their money.  They signed up for a certain level of risk but we found Invesco Perpetual’s actions were at odds with investors’ reasonable expectations.”

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