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Fund houses to co-operate with watchdog investigation

Under_reviewFour UK asset managers who stand accused of colluding on prices for flotations and a share placement have said they will co-operate with an investigation into the allegations by UK’s financial regulator.

The four firms, who were on Wednesday issued with a statement of objections by the Financial Conduct Authority (FCA), are Artemis Investment Management LLP, Hargreave Hale Ltd, Newton Investment Management Limited and River & Mercantile Asset Management LLP.

The FCA said that the alleged sharing of information generally occurred on a bilateral basis and “allowed firms to know the other’s plans during the IPO or placing process when they should have been competing for shares”.

A statement released by Newton said that the FCA investigation is focused on a small number of Newton’s UK equity-focused strategies that can invest in small and mid-cap UK equities and relates solely to activity surrounding two initial public offerings and a placement in 2014 and 2015.

“There has to date been no loss to any clients or investors as a result of the activity, and we do not anticipate any loss in the future,” the statement said.

“We take compliance matters seriously and are committed to ensuring that our business is managed with the highest commitment to legal and ethical standards.”

A statement from Canaccord Genuity Wealth Management, the owners of Hargreave Hale, said that the allegations relate to a period before Hargreave Hale was acquired by Cannacord and that the allegations had been disclosed during the due diligence process prior to the acquisition.

“Hargreave Hale has fully cooperated with the FCA and will be making further representations to the FCA for its review and consideration, with respect to the two transactions in question,” the statement said.

“We note that the findings are provisional and may not necessarily lead to an infringement decision.”

If the FCA ultimately finds against the firms, they could be fined up to 10% of their worldwide turnover in a specific market.

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