UK watchdog secures $101 million redress for BlueCrest fund investors

UK watchdog secures $101 million redress for BlueCrest fund investors

FCA's Action and BlueCrest's Response

By Kirstin Ridley

Details of the Settlement

(Reuters) -Britain's Financial Conduct Authority on Tuesday secured $101 million in redress for investors in a fund sub-managed by BlueCrest Capital Management and imposed a public censure on the investment firm, marking an end to a drawn-out battle.

BlueCrest's Defense

The FCA said BlueCrest, the investment firm co-founded by billionaire Michael Platt, had failed to deal fairly with a conflict of interest when managing an investment fund for the benefit of its partners and employees and a flagship fund available to external investors between 2011 and 2015.

Impact on Investors

The level of redress is a fraction of the estimated $700 million the markets regulator had initially sought, alongside a proposed 41 million-pound penalty. But the deal brought a positive end to a long-running case, the FCA's co-head of enforcement, Therese Chambers, said.

"BlueCrest put its own interest ahead of the external fund and provided a substandard service, which meant that investors lost out," she noted.

A spokesperson for BlueCrest said the firm did not accept the findings set out by the FCA.

But they added: "Given the significant amount of time that has elapsed since the events at issue and in order to draw a line under the matter, BlueCrest has agreed a settlement with the FCA."

The redress is for non-U.S. investors, who were not eligible for compensation under a similar U.S. scheme.

BlueCrest had attempted to strike out the FCA's case but the Court of Appeal reinstated the proposal last year. BlueCrest has withdrawn a subsequent appeal to the UK Supreme Court.

(Reporting by Kirstin Ridley in London and Yamini Kalia in BengaluruEditing by Shinjini Ganguli, Bernadette Baum and Frances Kerry)