THE FINANCIAL Services Authority yesterday instructed 25 chief executives from Britain’s largest fund management companies to set up internal investigations to check whether there was evidence thatemployees had engaged in controversial market practices.
Callum McCarthy, the chairman of the FSA, told the senior executives they had to take “personal and direct responsibility for ensuring there is a proper review of past trading practices”. He said they must inform the watchdog immediately if they find members of staff had used so-called market timing or late trading to boost their own profits.
The FSA said it has already started interviewing fund managers in this country, following a high-profile campaign to crack down on the practices in the United States. “So far we cannot conclude that the abuses are not a feature of the UK system,” Mr McCarthy said.
Fund managers in the US are currently in the spotlight after Eliot Spitzer, New York’s attorney general, turned his attentions to cracking down on companies that have indulged in questionable trading.
The Anglo-American giant Amvescap is among a number of companies being sued by Mr Spitzer over market-timing abuses, which have the effect of penalising long-term, often private, investors in favour of hedge funds and other professional money managers.
