Between October 2011 and December 2015, BlueCrest failed to manage fairly a conflict of interest created by its role in managing both an investment fund exclusively for the benefit of its partners and employees and a flagship fund available to external investors. BlueCrest’s management approved UK-based traders being moved from the external fund to work on the internal fund, in which they were personally invested and where they stood to benefit personally from those decisions.
Disclosures to investors were insufficient and, at times, misleading. Investors were not told that a significant number of traders were moved to work on the internal fund. This affected investors’ ability to make informed decisions. The firm’s failure to manage fairly the conflict led to a sub-standard service for the external fund and its investors.
Asset managers are trusted to make decisions for their clients. It is vital they have appropriate systems and controls in place to ensure conflicts of interest are managed fairly.
Therese Chambers, Joint Executive Director of Enforcement and Market Oversight, said: “This redress scheme brings a positive end to a long-running case. BlueCrest put its own interest ahead of the external fund and provided a substandard service, which meant that investors lost out. After many years of legal challenge, the FCA has now successfully secured a substantial USD 101 million for affected investors.”
The redress scheme will be overseen by BlueCrest. Affected investors will be contacted on next steps by BlueCrest or a scheme administrator if it chooses to appoint one.
• Final Notice 2025: BlueCrest Capital Management (UK) LLP.
• Redress Scheme Rules. The redress requirement imposed by the FCA seeks to redress non-US investors that were not eligible to be compensated by the SEC’s Fair Fund.
• On 22 December 2021, the FCA published a decision notice against BlueCrest for conflicts of interest failings, which BlueCrest referred to the Upper Tribunal on 22 November 2021. That Decision Notice has now been superseded by the Final Notice above.
• On 21 June 2023, the Upper Tribunal granted BlueCrest’s application to strike out the FCA’s case on redress. The Upper Tribunal also refused permission for the FCA to introduce certain new allegations and issues in response to arguments raised by BlueCrest.
• On 20 July 2023, the Upper Tribunal granted permission for the FCA and BlueCrest to appeal its decision.
• On 2 October 2024 the FCA won its case in the Court of Appeal, which upheld the FCA’s power to require redress from firms and allowed the FCA to amend its case at the Upper Tribunal.
• On 15 January 2025, the UK Supreme Court granted BlueCrest permission to appeal the Court of Appeal’s decision. BlueCrest’s appeal was due to be heard by the UK Supreme Court on 12 and 13 November 2025. That appeal has been withdrawn.
• On 8 December 2020, the SEC announced that BlueCrest Capital Management Limited, without admitting or denying the SEC's findings, had agreed to settle charges arising from inadequate disclosures, material misstatements, and misleading omissions concerning its transfer of traders between two of its funds. BlueCrest Capital Management Limited agreed to pay disgorgement, prejudgement interest and a penalty, which was to be returned to US investors (plus any interest or earnings, less certain administrative costs).
• On 18 February 2022, the SEC issued its approved plan of distribution for the purpose of establishing a Fair Fund comprising the disgorgement, prejudgement interest and penalty which BlueCrest Capital Management Limited had agreed to pay to compensate US investors for management fees paid in connection with investments in BlueCrest Capital International Master Fund Limited’s two unregistered feeder funds, BlueCrest Capital International Limited and BlueCrest Capital L.P., between 1 October 2011 and 31 December 2015.
• The FCA would like to thank the SEC for their assistance in this matter.
• The redress scheme covers UK and other non-US Investors, meaning any person, or their lawful successor, who held shares, units and/or an interest in the external fund during the relevant period 1 October 2011 to 31 December 2015, excluding any person who was covered by the SEC’s redress scheme and other investors such as certain BlueCrest Executives.
• The FCA’s Principles for Businesses.
Enquiries
Press: Frederick.Stevens@fca.org.uk / 020 7066 0787
|
