The scale of the crisis facing Man Group's new boss was laid bare as clients pulled billions more from its funds and an employee was arrested for insider dealing.
The troubled hedge fund said it had suspended a worker in the GLG unit it bought for $1.6bn (£1bn) in 2010.
The employee – who is believed to be Carl Esprey, a portfolio manager – was arrested on suspicion of insider dealing and market abuse.
The company said that it was "co-operating fully" with the Financial Services Authority (FSA) but would not comment on the identity of the individual.
"Man has been informed by the FSA that the investigation concerns the individual's actions as a private individual and not as an employee of Man or GLG," it added in a statement.
The news overshadowed Man's first set of full-year results under new chief executive Manny Roman where the company reported a £745m loss compared to a £193m profit in 2011.
Man said clients had pulled out $2.7bn in the final quarter of 2012, meaning the group has now had net customer outflows in every quarter over the past four years, apart from during the first half of 2011.
"Last year was another tough year for Man," Mr Roman said.
"Trading conditions were highly challenging as markets continued to be dominated by political uncertainties in Europe and the US and macroeconomic risks. Investor appetite remained muted, and, as expected, there was a further decline in Man's product margin mix and revenues," he added.
The group has also written down the value of its GLG acquisition by a further $746m.
GLG, which was founded as a division of Lehman Brothers in 1995, was meant to diversify the group away from its computer-driven AHL fund but has so far failed to bear fruit.
Mr Roman warned that Man's outlook remained challenging.
"The number of requests for proposals and the pipeline of new mandates have increased to a degree. However, given the lead time required by institutional investors to invest, gross sales are likely to remain muted in the first half and we are yet to see a slowdown in the rate of redemptions," he said.
Man said it expected to make $100m in cost savings by the end of the year. The group has already made a number of management changes.
"We have introduced changes to senior management to further enhance Man's focus on investment performance. We will maintain our efforts to make Man lean and efficient," Mr Roman said.Reuse content