Many of our clients may have read in the FT today (31/07/18) that Legal & General Investment Management (LGIM) has been reported to the FCA by two of its employees under a scheme known as 'whistleblowing'. Whistleblowing is a normal part of fund management risk controls, where employees are encouraged to take concerns which they feel are not being dealt with in their immediate reporting lines to independent investigators inside or outside the company. Many asset management firms will have experienced whistleblowing at some point.
We have spoken to LGIM about this report and clients should be reassured that they are taking it very seriously. This incident relates to three potential errors which were allegedly not correctly investigated. LGIM is conducting a full investigation into these at present. So far, one has been confirmed to have been an error, and the client in question has been compensated, one has been deemed not to be an error, and no further action taken, and the third remains under investigation.
It is perhaps worth noting that all these errors, or potential errors, took place some time ago, and, although LGIM has not confirmed the accounts in question in order to protect the identity of the whistleblower, we do not believe that any of the funds rated by Square Mile were affected.
We will remain in dialogue with LGIM, but if you have any questions please do not hesitate to contact a member of the Square Mile team.
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