Regulation  

Fund manager’s £89,004 FCA fine upheld

Fund manager’s £89,004 FCA fine upheld

The Upper Tribunal has upheld the FCA’s decision to fine a fund manager for assisting a client to commit alleged market abuse.

In 2013 the City watchdog banned Tariq Carrimjee, who was responsible for compliance at Somerset Asset Management, from performing any role in regulated financial services and fined him £89,004.

The FCA claimed Carrimjee “turned a blind eye to the risk of his client, Dubai-based Rameshkumar Goenka’s planned market abuse and recklessly assisted him in his attempt to achieve that goal”.

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The tribunal ruled that this risk should have been apparent to Mr Carrimjee. But it did not back up the FCA’s claims that he acted without integrity and therefore ruled that it should reconsider its decision to ban him.

In his conclusion, Upper Tribunal judge Timothy Herrington said: “Mr Carrimjee’s only knowledge of Mr Goenka’s trading strategy was that he wished to roll over an existing position by absorbing a large seller at a price as close to the closing price in the auction as possible.

“In the light of that being the case Mr Carrimjee’s explanations are consistent with that knowledge and do not indicate that he knew or suspected that there was a risk that Mr Goenka intended to trade for the sole purpose of manipulating the price of Gazprom GDRs as opposed to wishing to carry out the trades for a legitimate purpose which may have the effect of influencing the price.”

Background box

David Davis, the senior partner and compliance officer at Paul E Schweder Miller & Co and Vandana Parikh, the broker at the same firm who executed the trades, were fined £70,258 and £45,673 in July 2012 and August 2013, respectively.

Mr Goenka was fined £6m for market manipulation in November 2011.