Gam has agreed to shell out over £400k to avoid being sanctioned by the regulator of the Swiss stock market over an alleged misleading statement in its accounts.
The Zurich-based fund group confirmed it will pay a financial penalty of CHF 400k (£316k) and costs of CHF 100k (£79k) after the sanctions commission for Six Exchange Regulation (Six) upheld proposed sanctions against the firm.
Shares in the Swiss fund group slid 5% on the back of the news but were trading just shy of the previous closing price by mid morning.
Gam first clashed with Six in December. The regulatory arm of the Swiss listing authority accused Gam of misstating its accounts in connection with its acquisition of quant firm Cantab Partners. Gam stood by its accounting at the time and said it would file objections to the sanction proposal.
Gam accepts decision but has ‘different point of view’ on accounts
In a statement on Thursday the Swiss manager said it was willing to accept the decision made by Six’s sanctions commission and would pay the penalty even though it had “a different point of view” on the accounting matter.
“Gam takes its financial reporting responsibility very seriously,” a spokesperson for the company said, “and held a different point of view in good faith on this technical accounting matter, due in part to external and independent expert advice.”
Following the decision Gam will be required to recognise the financial liability arising from its purchase of Cantab at fair value in its future financial statements and restate any impacted historical comparative amounts.
It estimates the liability from Cantab is around CHF 35m (£28m) but said this will only crystallise once matching performance fees are received.
The accounting mishap is not expected to affect its underlying profit for 2019 of CHF 10m (£8m).
The threat of sanctions is the latest blow for the Swiss fund house which has been in the spotlight since the suspension of one of its star managers Tim Haywood.
Since then the firm has suffered a tidal wave of redemptions, seen its shares plummet by 70% and endured a string of senior exits. The embattled manager also looks set to cut hundreds of jobs as current CEO Peter Sanderson (pictured) attempts to turn the business around.
