A former top executive at French asset manager H2O AM LLP has been fined and banned by the U.K.’s Financial Conduct Authority (FCA) for misleading the regulator.
The FCA banned the former deputy CEO of H2O AM, Jean-Noel Alba, from the financial industry in the U.K., and fined him £1.05 million after it concluded that Alba misled the FCA during an investigation into the firm’s due diligence practices — which resulted in the firm paying €250 million in compensation to harmed investors.
Among other things, the regulator found that during its investigation into concerns about due diligence and conflicts of interest surrounding risky, illiquid investments by H2O, it was misled by Alba.
Specifically, the FCA alleged that Alba asked junior colleagues to fabricate records and minutes for committee meetings, where no formal meetings took place. It also alleged that he provided materials to the FCA, such as investment research, that purported to show evidence of due diligence into certain investments, when those materials had actually been “created years after the investments had been made…”
As a result, the regulator concluded that Alba breached certain FCA principles and conduct rules.
Alba agreed to settle the FCA’s allegations and qualified for a 30% discount on his financial penalty, which otherwise would have been £1.5 million.
“Senior leaders in financial services need to act with integrity. Mr. Alba fell well short of those basic standards,” said Steve Smart, joint executive director of enforcement and market oversight at the FCA, in a release.
“He has no place in the industry. This ban and substantial fine should serve as a warning to others that if you mislead the FCA, you will face the consequences,” he added.