Gartmore, the investment group, yesterday reinstated Guillaume Rambourg, the fund manager it suspended last month.
The firm admitted yesterday that an investigation had found that Mr Rambourg had breached its rules, but that his wrongdoing was not sufficiently serious, in its opinion, to break FSA guidelines. The investigation was carried out by the law firm Clifford Chance.
Mr Rambourg was suspended after directing trades carried out by Gartmore traders, which the firm guards against in order to avoid favouring specific brokers. It is not against FSA rules.
Gartmore said yesterday that no client money had been lost as a result of the trades and that the breaches were not widespread, "representing 5 per cent over the last 12 months and 1 per cent over the last six months," the firm said.
Nonetheless, Mr Rambourg will not immediately return to his previous role as a fund manager. Gartmore's chief executive Jeff Meyer said details of the case had been sent to the FSA for consideration and until that time, Mr Rambourg would work in the more junior role of investment analyst. Mr Meyer refused to discuss details of his salary, but confirmed that Mr Rambourg would be promoted back to his old job as long as the FSA cleared him of any malpractice.
However, Mr Meyer acknowledged lingering concerns over Mr Rambourg. "One of the issues that the regulators are struggling with, and we are struggling with, is that there has been an accumulation of errors on behalf of Guillaume," he said.
The company will also bring forward its interim management statement to early May so as to give clarity on any outflows of client money prompted by the suspension, Mr Meyer added.
The suspension of Mr Rambourg was embarrassing for Gartmore, which listed at more than 200p a share in December last year.
News of the suspension, and allied worries that the group could see significant client outflows as a result, sent the share price tumbling from nearly 210p to 116p. On news of the reinstatement yesterday, Gartmore's stock put on 15.6 per cent, closing at 164p.
Separately, Gartmore faces an inquiry by the US Securities and Exchange Commission, which is investigating short selling by the firm of a security ahead of a public offering. Gartmore has made a provision of $1.9m (£1.25m) in the event that it is fined.