Charged by the Autorité des Marchés Financiers, the Commission Bancaire inspected Man Financial SA to examine the company's compliance with conduct of business rules applicable to investment services providers. The inspection established that transactions coming within the scope of an own-account dealing service, for which Man Financial SA was not authorised at the time, had been recorded in an "error" account. It also noted shortcomings in the formalisation of professional obligations and internal procedures as well as in the investment services oversight procedures carried out by Man Financial SA.
The Enforcement Committee endorsed the Commission Bancaire's findings and judged that the shortcomings were due to the fact that, at the time of the inspection, Man Financial SA had not implemented sufficient technical and human resources to enable the investment services supervisor to carry out his duties. On this point, the Enforcement Committee stated that "although Man Financial SA was able to rely on the assistance of its parent group for the purposes of investment services oversight, this did not exonerate it from its regulatory obligations".
The Enforcement Committee also said that this situation had "contributed to questionable practices classifiable as unauthorised own-account dealing, whereas Man Financial SA had not been authorised [to deal for own account] since January 2000". The Committee found that some transactions had been undertaken on the company's initiative, which involved the use of "error" accounts, even though such trades were subject to an own-account dealing authorisation, which Man Financial SA no longer had.
Meeting on 15 March 2007 further to the sanction proceedings, the Enforcement Committee:- fined Man Financial SA €80,000;
- cleared Philippe Champion, the managing director responsible for investment services oversight. On this point, the Committee noted that even though Mr Champion was a senior executive and was responsible for supervising investment services, he had neither the resources nor the possibility to remedy the shortcomings on his own initiative, in view of the ties between Man Financial SA and its parent.
An appeal may be lodged against this decision in accordance with Articles R. 621-44 to R. 621-46 of the Monetary and Financial Code.
