H2O Asset Management agreed to pay €250mn in compensation to investors, after the UK Financial Conduct Authority determined that it had committed “serious violations” with regard to illiquid investment.
H2O, once a leading star in the European investment industry that managed more than €30bn of assets at its height, was plunged into a crisis after it revealed substantial exposure to securities difficult to sell tied to controversial financier Lars Windhorst.
The FCA stated on Wednesday that the firm “failed” to “do proper due diligence” in relation to these investments. It also failed to declare hospitality, which included “the use a private jet and superyacht”.
The regulator said that H2O also provided “false, misleading statements and documentation”, including “fabricated minutes and records of meetings”.
The FCA stated that it would have imposed “substantial” fines on the asset manager, but agreed to H2O’s payment of €250mn to investors who have had their funds trapped for many years.
H20 will also request to cancel its UK regulatory authorization by the end the year.
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