GAM’s scandal-hit absolute return bond head Tim Haywood failed to conduct sufficient due diligence on some investments and breached company policy on gifts and entertainment, according to the findings of the firm’s internal investigation.

GAM said that Haywood, who oversees £8.5 billion, breached its signatory policy by signing off on contracts alone, where two signatures were necessary.

He is also said to have breached the company's gifts and entertainment policy by not asking for pre-approval and using his personal email for work purposes.

In an update to its clients today, the Swiss asset manager concluded in its investigation that Haywood (pictured) failed to ‘conduct or evidence sufficient due diligence on some of the investments that were made, or make accessible internal records of documents relating to these’.

The firm said its ‘thorough investigation’ into Haywood’s conduct is ‘largely completed’, with the firm now moving on to following its internal disciplinary procedures.

The update followed a Times report this morning that traders at GAM contacted investment banks and institutions in an attempt to unwind positions ahead of Haywood's suspension.

An investment bank trader who requested anonymity told the paper that his company had been contacted by staff at GAM late last month, asking it to bid for assets being sold by the funds.

The trader said: ‘I got messages like, "Can you bid on this bond for a fund liquidating?". I saw loads of messages from GAM traders about a fund liquidating.’

Another trader told the newspaper that GAM had approached financial institutions in an attempt to sell assets from its absolute return bond funds.

The FT reported today that in its review, GAM learned that some of Haywood’s portfolio investments were in ‘illiquid debt securities’ that ‘had not been subject to proper due diligence and risk control reports’.

The firm said it has ceased charging any management fees on the funds while they remain suspended, and is considering liquidating the funds, though no decision has been made public.

Jack Flaherty and Alex McKnight have assumed joint responsibility for the GAM Multibond – Absolute Return fund and associated portfolios.

Citywire+ rated Daniel Sheard, who had co-run the absolute return strategies, is now not involved in the day-to-day running of the fund and continues to run other fixed income portfolios.