Release Date: 29th March 2022
To access the original FCA document, click here.
Summary
Timothy Haywood was fined £230,037 by the Financial Conduct Authority (FCA) on 29 March 2022 for breaching Statement of Principle 7 and Statement of Principle 2 between 20 October 2016 and 8 January 2018. The fine was reduced from £319,044 due to an early settlement agreement. The FCA found that Haywood failed to manage conflicts of interest fairly and did not act with due skill, care, and diligence, particularly in relation to two Greensill-related investments and breaches of the Gifts and Entertainment Policy.
Key Takeaways for Other Firms:
- Conflict of Interest Management:
- Document all conflict of interest issues and ensure they are escalated appropriately.
- Conduct thorough due diligence and prepare recorded analyses for all investments.
- Ensure conflicts of interest are managed fairly and transparently.
- Compliance with Policies:
- Adhere strictly to internal policies on gifts and entertainment, obtaining necessary approvals.
- Record all gifts and entertainment accurately and in a timely manner.
- Oversight and Accountability:
- Senior management must set a proper tone and ensure compliance with regulatory requirements.
- Implement robust oversight mechanisms to detect and address policy breaches.
Summary of Findings:
- Failures in Conflict Management:
- Haywood did not document or escalate conflict of interest issues related to the Laufer 1 investment and SCF Fund, despite potential incentives from Greensill.
- Haywood invested client funds without ensuring conflicts were properly managed, breaching Statement of Principle 7.
- Gifts and Entertainment Policy Breaches:
- Haywood accepted significant gifts and entertainment from Greensill, including private jet travel and dinners, without obtaining prior approval or timely recording these items, breaching Statement of Principle 2.
- These actions posed a risk of influencing investment decisions in favour of personal interests rather than clients’ best interests.
In conclusion, the FCA’s action against Timothy Haywood highlights the critical importance of managing conflicts of interest and adhering to internal policies, especially for senior management in asset management firms. Firms must ensure robust documentation, proper escalation procedures, and strict compliance with policies to maintain trust and regulatory compliance.
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