Former Mercurius Capital Management CEO Michiel Weiger Visser will be fined £2m and the company ex-CFO Oluwole Modupe Fagbulu £100,000, and both will be banned from performing any role in regulated financial services.
The decision backs the FSA’s ruling that the pair breached Principle 1 of the FSA’s Statements of Principle for Approved Persons and engaged in market abuse.
The penalties were the result of the pair’s actions leading up to the collapse of hedge fund Mercurius international, which was placed into voluntary liquidation in January 2008.
The FSA found Visser and Fagbulu had deceived investors and concealed certain information for over a year, allowing them to raise a further €8m of new capital in the three months prior to its collapse.
Although the Tribunal believed Fagbulu’s behaviour merited a larger fine, it reduced the amount because a larger fine would “cause serious financial hardship”.
Visser applied to have the Tribunal’s decision set aside.
“Visser and Fagbulu’s conduct fell woefully short of the standards required of approved persons,” said FSA acting director of enforcement and financial crime Tracey McDermott.
The Tribunal described Visser’s conduct as the worst it had seen.
The FSA found Visser deliberately misled investors by engaging in market manipulation to disguise the performance of the fund and secure continued and increased investment.
Amongst other actions, Visser concealed performance from investors by manipulating the Net Asset Value and twice instructing Fagbulu to commit market abuse, the FSA said.
While Fagbulu did not make investment decisions, the FSA said he deliberately made or approved communications to investors which contained false information and omitted relevant information.
“They showed a flagrant disregard for the interests of their investors and over a considerable period engaged in a sustained and deliberate course of deception to present a picture of the fund’s performance that was entirely false,” said McDermott.
