BAM fined pounds 50,000 by Imro

A subsidiary of Banque Nationale de Paris was yesterday fined pounds 50,000, ordered to pay compensation of pounds 502,000 to 24 customers and costs of pounds 47,850 because it failed to control a fund manager who dealt without authorisation after arranging a new issue of shares.

BAii Asset Management (BAM), which is based in Piccadilly, London, accepted charges that it had failed in its internal organisation and did not have effective procedures to record all information on its customers.

Imro, the fund managers' regulator, announced that BAM had failed to supervise a fund manager who dealt in the secondary market of a new share issue in August 1995. BAM had failed to document a limit placed on the level of dealing the fund manager was allowed to undertake.

Imro said BAM had failed to ensure customers knew the risks of the investments it was making and also failed to secure proper agreements with four of its customers. It had also failed to keep records of important facts about its private customers as soon as it became aware of them.

Omar John Khayat, a former employee of the BNP subsidiary, BAii Asset Management, was yesterday expelled from membership of Imro.

Imro issued a separate statement saying Mr Khayat had misrepresented himself to his manager and other BAM staff and misrepresented how much dealing he undertook. He had claimed deals had reported late when they had not, delaying the processing of deal tickets.

Mr Khayat also dealt over his own firm's limit in the share issue. He allocated shares acquired on behalf of BAM customers without following procedure.

"As a result of the above, Imro does not consider Mr Khayat to be fit and proper to act as a registered individual," the statement said.