The Martin Currie manager at the centre of an £8.6 million fine levied by UK and US regulators last week has accused the company of making him a ‘scapegoat’ and waging a ‘smear’ campaign.
In an interview with The Times former employee Chris Ruffle claimed that the business was also trying to forcibly acquire his shareholding in the company.
Martin Currie is planning to introduce a clause permitting it to buy back shares in the business held by anyone it deems has bought the company into disrepute.
The business was fined £3.5 million by the FSA and £5.1 by the US Securities & Exchange Commission over client investments in three unlisted Chinese bonds.
The SEC claimed that Martin Currie had effectively defrauded a US client by using its funds to prevent losses by another client. Ruffle was the portfolio manager in charge of both client accounts.
‘I’ve done nothing wrong. I feel I have been made the victim of a smear campaign,’ said Ruffle. He added that a ‘few communication issues in the compliance and legal department’ had escalated out of all control and led to him being branded a ‘rogue trader’.
He added that others in Martin Currie had been aware of the trade. ‘It’s a cross between Alice in Wonderland and Kafa,’ he said.
Shanghai-based Ruffle currently owns 140,000 Martin Currie shares, reportedly worth £490,000, and has been a shareholder since 1995.
The firm, headed by chief executive Willie Watt, has endured a tough time since the discovery of the three unlisted China investments despite having brought the matter to the regulators' attention.
It has seen assets under management slip from around £11 billion to £5 billion since the disclosure was made and referred to the FSA and SEC.
Having fully underwritten any potential losses to clients from the China investments, which the company said had made up less than 1% of its business at the time, Watt said he believed that the fines would bring closure to what has been a turbulent period for the firm.
Asset falls have also been exacerbated by market falls in the last year in its favoured Asia Pacific regions and due to the loss of some major institutional clients and come despite decent performance from a number of its alternative Ucits strategies as well as its global equity income fund.
Watts believes that the process is now at an end and will allow the firm to refocus on its core business strategies.
In a letter sent to clients, Watt said: 'The incident also exposed certain weaknesses in Martin Currie’s systems and controls. We reported this incident to both the Financial Services Authority (FSA) and SEC and promptly instigated a thorough investigation to establish the facts and lessons to be learnt.'