From the FT’s Lombard column.
Simon “Scissorhands” Treacher has added to the list of clumsy ways in which financiers can fall foul of the Financial Services Authority. BlueBay Asset Management’s experienced emerging markets fund manager cut and pasted erroneous figures into his monthly valuations, then misled the UK regulator about what he’d done.
Once popular, and widely quoted on everything from Ukrainian Eurobonds to the finances of the Philippines, he was described, before his downfall, as a “star performer”. Thanks to his reckless collage, he ends his career with a lifetime ban, a £140,000 fine (a record for mis-marking) and a reputation as the Pritt Stick Portfolio Manager or the Blue Peter Cheater (“Today we’re building better fund performance using just scissors and glue: here’s one I made this morning”).
The acts, carried out between August and October 2008, inflated the value of his funds by a mere $27m. That’s a fraction of the £600m or so by which one of the funds fell in the 12 months before it was finally closed in November 2008. At the time far more costly errors of judgement were destroying reputations in world finance.
But still, let Mr Treacher join the list of those who should now be used to set an example to others. He was, as the FSA points out, well-paid, highly experienced and should have known better. Although BlueBay claimed in 2008 that the fund was closed for reasons unconnected to Mr Treacher’s mis-marking – and it compensated customers affected – his actions must have damaged the asset management group’s reputation.
In another jurisdiction, Mr Treacher might be facing jail for trying to mislead BlueBay’s customers, let alone the watchdog itself. As it is, he benefits from a “discount” on his fine for settling at an early stage. The breach itself, however, cannot and should not be papered over.
The FSA’s Final Notice for “Scissorhands” Treacher can be found here.
Related link:
The little bucket shop of horrors – FT Alphaville