Two of the City figures involved in the split capital investment trust debacle escaped disciplinary action yesterday as the latest chapter in the drawn-out affair drew to a close.
Alan Kerr, the former head of investment trusts at Legg Mason Investments, part of the US financial services group, and David Keen, his opposite number at Morley Fund Management, came to an agreement with the Financial Services Authority which ended investigations into their activities.
The FSA, which has investigated the split capital trust sector for three years, said it had agreed to take no disciplinary action against either individual and that in both cases it had not made a finding of regulatory breach. It also said in separate statements that both men had not made any admissions in relation to the case.
Under the terms of the agreement Mr Keen, who retired from Morley in November 2001, gave an undertaking not to apply for approval from the FSA to perform a regulated function within the financial services industry for one year from 22 December. Mr Keen, who is only 53, still has the possibility of renewing his City career in a short time.
Mr Kerr agreed to the same undertaking, although he is already working in an unregulated capacity for Premier Asset Management, one of the 18 fund management groups that last Friday agreed a £194m settlement with the FSA to compensate investors who lost out in split cap trusts that started to collapse in 2000 and 2001.
Mr Kerr has also agreed to withdraw the proceedings he had brought against the FSA under the Financial Services and Markets Tribunal relating to an application he had made for authorisation to work in a regulated capacity.
The FSA's findings relating to Mr Kerr and Mr Keen follow the outcome of two other cases involving individuals caught up in the split caps investigation which were also announced last Friday. Christopher Fishwick, formerly of Aberdeen Asset Management, gave an undertaking not to apply for any regulated or "controlled" functions for seven years, while David "Dotty" Thomas, the former consultant at Brewin Dolphin, has agreed not to apply for regulatory approval in future and is retiring from the industry aged 71.
Mr Thomas had begun proceedings against the FSA under the Financial Services and Markets Tribunal to win approval by the FSA for an application to perform a regulated function. He has agreed to drop the proceedings as part of his settlement.
The split cap case has proved a headache for the FSA, which had been holding out for a much bigger settlement from the firms involved than the £194m it agreed to. There are eight further individuals with FSA investigations outstanding and another four firms yet to reach a financial settlement with the regulator over the question of compensation for investors.Reuse content