LONDON - The Investment Management Regulatory Organization reprimanded Barr Rosenberg European Management and its senior management Dec. 22 for breaching IMRO compliance rules.
Barr Rosenberg European, has agreed to settle the charges and is paying the regulator's costs of *13,000 ($21,800). Rosenberg's London operation manages *356 million and subadvises on another *108 million.
The firm's parent, Rosenberg Group, in October sold a 60% stake for about $125 million to AXA Investment Managers.
A spokeswoman for IMRO said a fine was not imposed because the offense was not deemed serious enough, clients did not incur any losses and company officials cooperated with the regulator.
IMRO charged that, between April 1995 and September 1997, officials at the firm failed to implement adequate compliance procedures, failed to monitor compliance and knowingly gave wrong information to IMRO about its compliance practices.
IMRO said the firm had failed to require compliance reports to be submitted to the board and failed to lay out the compliance duties of the firm's chief investment officer and require training of staff.
The compliance failures were outlined by IMRO officials during an April 1995 visit.
While Rosenberg officials agreed to improve the firm's procedures, they failed to do so.
An Aug. 22, 1997, report sent by the firm to IMRO did not disclose disclosure shortcomings, even though the firm's own compliance officer had informed senior management on several occasions of the inadequacies, and warned the report could lead to disciplinary action.
The report also stated the firm's board had approved the report Aug. 18, 1997, even though no board meeting had taken place on that date.
The firm's managing director, Jennifer Patterson, was reprimanded for signing the report even though she knew it contained inaccuracies, IMRO said. Barr Rosenberg European's former compliance officer, William Cansdale, also failed to ensure information in the August 1997 report was accurate, IMRO said.
In an interview, Ms. Patterson said the firm is pleased a minimal censure was involved and that the incident pointed to "a lack of real competence and control" at her firm. Compliance has been given a higher priority at the firm since that time, she said.
