GAM launched an investigation into former fixed income absolute return star Tim Haywood (pictured) after concerns about his activity were flagged by an internal whistleblower, the company has said.
The statement from the group followed a claim by financial media site finews.asia, which reported that concerns over his trades had been passed to management by his ‘long-time [professional] partner’ late last year, and were subsequently passed to the Financial Conduct Authority.
The site did not name the individual, who is subject to whistleblower protections, but said the two became a ‘dream team’ through 12 years of co-investment, during which they became pivotal to the company’s performance.
‘In November 2017, an internal investigation, supported by independent external counsel, was launched,’ GAM said in a statement. ‘In March 2018, the whistle-blower expanded on the initial concerns and contacted the FCA whilst keeping the company informed.
‘The internal investigation evolved as more facts and circumstances were uncovered and identified a number of potential misconduct issues, the cumulative effect of which led to the decision to suspend Mr Haywood.
‘As previously stated, no other employees are being investigated in relation to these matters and no evidence was found to indicate that such an investigation regarding other employees was required.’
Shares in the business have tumbled since the July exit of head of absolute returns Haywood – who the company subsequently accused of breaking its inducement and dealing rules – and the suspension of redemptions from his £5.6 billion Absolute Return Bond fund.
Zurich-based GAM has more recently said it would liquidate the range and would likely be able to return the bulk of client capital in September.
It added that between 60% and 87% of affected assets had been returned to clients with a second round of liquidations taking place this week
Chief executive Alexander Friedman added: ‘At the heart of every modern financial services firm’s systems and controls should be a culture that encourages people to come forward with concerns about colleagues’ behaviour.
‘The only way to maintain that culture is to protect those who are brave enough to do so and to hold accountable those found to be breaking the rules. This is central to trusted client relationships and we will never compromise on this point.’