Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Manager at centre of £8m Martin Currie fine claims he is 'scapegoat'

Manager at centre of £8m Martin Currie fine claims he is 'scapegoat'

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.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play JPM’s Negyal: Back divis to temper EM volatility

JPM’s Negyal: Back divis to temper EM volatility

Omar Negyal, co-manager of the JPMorgan Global Emerging Markets Income trust, says a dividend approach to emerging markets reduces the volatility of investing in the asset class.

Play WMR: Why Russia will lose this war

WMR: Why Russia will lose this war

Author and journalist Adam Lebor believes a perfect storm is brewing when it comes to the Russian economy. .

Play WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

Chief economic adviser to London mayor Boris Johnson outlines the geo-political risks in Asia and explains why the risk of another eurozone crisis must not be underestimated.

Your Business: Cover Star Club

Profile: The adviser that tempted Robin Minter-Kemp on board

Profile: The adviser that tempted Robin Minter-Kemp on board

It is rare to meet an impassioned individual who is willing to bang the drum for investment advisory right now

Wealth Manager on Twitter