Gartmore chief spells out reason for suspending Rambourg

The chief executive of Gartmore Jeff Meyer has spelled out to Citywire his reasons for suspending star fund manager Guillaume Rambourg yesterday.

Rambourg has been suspended after an internal investigation found that he was requesting the company’s dealers place trades with particular brokers, which is in breach of the company’s own internal guidelines which are intended to ensure that it remains well within the FSA’s rules on ‘best execution.’

Meyer has said that with the investigation ongoing it is impossible to be certain that Rambourg was not receiving any inducements from brokers but that he has seen no evidence of it and would be shocked if he discovered that is the case.

The most benign explanation would be that Rambourg was simply trying to reward brokers for helpful research ideas presented to him. Yet the company discovered the breaches of internal rules just weeks after the Italian regulator fined Rambourg €300,000 for frontrunning a broker note. Gartmore continues to protest his innocence on this though and has filed an appeal in the Italian courts.

Meyer said that it also appeared that Rambourg had been asking brokers to sell to specific dealers if the same price could be achieved.

Meyer has said that he has not seen evidence that the dealers’ own judgements were overridden when making the trades. He also said that he has not seen evidence that he was ever not securing best execution, though he stressed that the investigations had not yet been concluded.

Meyer acknowledged that it is hard to understand why Rambourg would put his highly successful career in jeopardy simply to do a favour for helpful brokers and confirmed that as recently as last summer he had signed documents confirming he understood the company's rules on trading.

He said: ‘It is hard to say what the motivation might be. I have not asked him because you cannot ask much once the investigation has started.’

Meyer would not comment further on Rambourg's motivation though company sources have suggested to Citywire that the current consensus view internally is that the trades represented a simple lack of judgement rather than any attempt to profit.

Rambourg’s co-manager – and Gartmore’s largest shareholder – Roger Guy has been spending the day calling investors in the funds. He has not been implicated in the trades though Meyer admitted that the investigation has not yet progressed far enough to definitively confirm that Guy did not know about the practice. Meyer said: ‘Roger has just flown back from his vacation, he is on investor calls and running the money so I have not had extensive discussions with him.’