Split caps chief faces FSA tribunal

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The Independent Online

The former head of investment trusts for Legg Mason Investors, one of the 21 firms involved in the split-cap trust débâcle, is due to face the Financial Services & Markets Tribunal later this year, for what is believed to be an appeal against an enforcement decision by the Financial Services Authority.

The former head of investment trusts for Legg Mason Investors, one of the 21 firms involved in the split-cap trust débâcle, is due to face the Financial Services & Markets Tribunal later this year, for what is believed to be an appeal against an enforcement decision by the Financial Services Authority.

The FSA recently finished a major investigation into the sector after its collapse in 2001, which saw investors lose an estimated £700m.

Alan Kerr, who left Legg Mason towards the end of last year, is on a list of individuals and firms due to appear before the tribunal at hearings over the coming months. The FSA, Legg Mason and Mr Kerr all refused to comment on the nature of the case.

Other individuals on the list include David "Dotty" Thomas, one of the architects of the split-cap industry, and Chris Headdon, the former chief executive of Equitable Life, both of whom are appealing against lifetime bans by the FSA. But Mr Headdon, who was due to appear before the tribunal in seven days, is believed to have struck a deal with the FSA last week, agreeing to a ban of just six years rather than a ban for life.

The other main reason an individual may face the tribunal is in the event of an appeal against an FSA decision to block an application for authorisation. Mr Kerr is currently employed by Premier Asset Management, working in an unregulated capacity in its investment trust division.

Legg Mason Investors is believed to be one of only a handful of companies to have agreed to enter talks with the FSA after the conclusion of its recent investigation. Most of the remaining 20 companies turned down the regulator's demands last week to stump up collective compensation of £350m. As a result, the FSA said it would begin full enforcement proceedings against the companies.

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