GAM said it suspended one of its bond fund managers because he may have failed to carry out enough due diligence to some of his fund's investments.
In a letter to clients, GAM chief executive Alexander Friedman said the decision to suspend Tim Haywood was made because some of the investments in the €9.5bn (£7.33bn) absolute return bond strategy included investments into illiquid assets, and there was a lack of evidence of due diligence.
Last week GAM froze redemptions from the unconstrained/absolute return bond strategy after it experienced redemption requests of "more than 10 per cent".
Mr Friedman has insisted that none of the company's other strategies were affected by this issue and there was no evidence which indicated other employees were involved.
The holding of such illiquid investments is not forbidden by the mandate of the fund, and Mr Friedman said there is no evidence of "client detriment".
The company said Mr Haywood may have breached the company’s rules on gifts and entertainment policy. But the firm said that at no time was there a "conflict of interest" between the clients of the fund and the fund manager.
Mr Friedman said: "Taken together, this conduct is of significant concern to GAM. The company seeks to uphold high conduct standards in all areas of our business. As a result, Mr Haywood was suspended pending the outcome of internal disciplinary procedures.
"It should be noted that the investigation found no evidence that Mr Haywood was motivated by an improper rationale in making investment decisions or that there was any conflict of interest between him and clients."
The shares of GAM have fallen by about 20 per cent since the news of Mr Friedman’s suspension was revealed, and redemptions were barred from certain bond funds run by GAM.