Former BlueCrest hedge fund manager banned and fined £35k

Former BlueCrest Capital Management hedge fund manager Loic Albert Antoine Montserret has been banned and fined £35,000 by the Financial Services Authority (FSA) for mismarking trading positions to hide losses.  

This is the first time the FSA has both banned and fined an individual for mismarking trading positions.

The FSA said  Montserret committed the act in an attempt to avoid losing his job over losses he was making on his trading book. 

According to the FSA, from November 2007 to May 2008, Montserret was responsible for managing $60 million (£41 million) of the capital in the BlueCrest Multi Strategy Credit fund.

From April 2008, changing market conditions resulted in a significant fall in the value of Montserret’s trading book which he knew would put his job at risk.

The FSA said that to disguise the extent of his losses, Montserret mismarked four equity index options by valuing them at nearly two to three times their actual market price. This went for 10 days and resulting, at its maximum, in the fund being overvalued by $8.6 million.

On the tenth day, he admitted the overvaluation to the head of his trading desk.

His acitions prevente BlueCrest from properly monitoring his trading book, meaning customers were put at the risk of making investment decisions based on incorrect information.

FSA director of enforcement, Margaret Cole, said: 'Market professionals cannot resort to mismarking whatever the circumstances. Mr Montserret’s behaviour fell short of the standards expected from approved persons and showed a lack of integrity and honesty on his part.

She added: It is important that investors can trust market professionals to always do their job appropriately and fairly.  Our tough action in this case should serve as a deterrent to others who might damage market confidence by acting in a similar manner.'