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View the article online at http://citywire.co.uk/wealth-manager/article/a748187

Invesco Perpetual fined £18.6m for risk failings linked to Woodford funds

by Dylan Lobo on Apr 28, 2014 at 11:10

Tracey McDermott (pictured), FCA director of enforcement and financial crime, said in a statement: 'As a forward looking regulator the FCA takes action where we see risks to consumers, not just after they suffer losses. In this case, investors of all sizes trusted Invesco Perpetual to manage their money. 

'They signed up for a certain level of risk but we found Invesco Perpetual’s actions were at odds with investors’ reasonable expectations.'

In a separate statement Invesco Perpetual said it was now confident its systems meet regulatory standards.

The firm's chief executive Mark Armour said: 'This (the fine) refers to a period between May 2008 and November 2012, and the FCA has noted that Invesco Perpetual acted promptly to enhance its systems and controls.'

He added: 'We are confident that our systems and controls are now strong, effective and compliant with all applicable regulations. The small number of impacted funds were fully reimbursed.

'In this instance, we clearly fell short of the high standards we consistently strive to deliver. However, we are pleased that this matter has been fully resolved with the FCA and is now closed.'

Invesco Perpetual pointed out the penalty is equal to 0.67% of Invesco's 2013 US generally accepted accounting principles (GAAP) revenues and will not materially impact the company's financial position.

It also highlighted that the regulator deemed the seriousness of the breaches at level 2, the lowest at which a financial penalty applies.    

The fact Invesco Perpetual agreed to settle early meant the level of fine was reduced by 30% from £26.6 million.

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1 comment so far. Why not have your say?

shirley

Apr 28, 2014 at 11:15

The 'prompt compensation' paid to the funds, but what about investors who had already sold their holding?

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