Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.
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1. Investigations rise as FCA cracks down on fund managers
J O Hambro Capital Management (JOHCM) is the most recent firm to be investigated by the Financial Conduct Authority as the asset management sector comes under greater scrutiny from the regulator.
An investigation is under way relating to the period between 2006 and January 2016, where the FCA are examining “the eligibility of certain services paid by J O Hambro Capital Management Limited”, a statement from the fund manager declared. The amount paid out from dealing commissions during this period had been estimated at AUS$8.6 million (£5 million).
The statement went on to explain: “We are cooperating fully with the FCA in relation to the investigation, which is ongoing.” Whilst no findings have yet been made, the FCA has a history of delivering fines for cases such as this.
In 2014, Invesco received a penalty amounting to £18.6 million for failings to clearly disclose to investors the associated risks of its use of derivatives, alongside failures to comply with certain investment limits. Additionally, Aviva Investors was fined £17.6 million the year after for systems and controls failings that led to its failure to manage conflicts of interest fairly.
This week’s news also featured the FCA’s dealings with Capita Financial Managers (CFM). After the firm’s Connaught Income fund collapsed in 2012, losing investors approximately £118m, the regulator has ordered CFM to pay back investors up to £66m. Although these failing would usually incur a penalty, the FCA are satisfied with the £66m reimbursement agreement it struck with the firm.
Following the Asset Management Market Study carried out by the regulator, with the final report released early this year, the industry is expected to come under much greater scrutiny going forward. As they prepare for a more heavily regulated market, and an increased number of enforcement investigations, firms must get to grips with the new regulatory landscape before it’s too late.
2. Tis the season: US firms kick off 2018 partnership promotion round
The 2018 partner promotions round has kicked off in earnest as Latham & Watkins, DWF and DAC Beachcroft announce the associates who have made it to partnership this year.
This follows announcements from Ropes & Gray, Bryan Cave, Proskauer Rose and Cleary Gottlieb last week, with White & Case revealing their global promotions round in October.
Global powerhouse Latham & Watkins revealed a 31-strong promotions round, with finance associate Charles Armstrong and corporate associate Huw Thomas making it into its City partnership. The US saw the majority of the firm’s promotions, with 24 lawyers being made up predominantly across the corporate and litigation practices. A third of this year’s promotions were also female, a significant increase on last year when the firm only made up 4 women from 27.
This matched the number of lawyers made up at competitor White & Case, who added seven new partners to its London office.
Ropes & Gray saw a steady promotion round of 12, making up two in the City, consistent with the number of partners the firm has made up in London over the past 2 years. Derivatives and structured finance specialist Anna Lawry and leveraged finance lawyer Alex Robb made the cut, replacing the two finance partners the firm lost to King & Spalding this summer. The US again saw the lion’s share of promotions, with two lawyers being made up in Hong Kong, and the promotions being spread evenly across the firms’ practice areas.
Bryan Cave and Proskauer Rose made up similar numbers in their London offices, promoting one and three to partner respectively. Currently in merger talks with BLP, Bryan Cave made its first promotion in London since 2014 with corporate lawyer Andrew Hart amongst a global round of 13. Proskauer Rose also made up three in London with a funds and corporate heavy round that saw Edward Lee and Andrew Shore and Liam Arthur making it to partnership from 14 lawyers promoted globally.
Cleary Gottlieb Steen & Hamilton revealed one of its smallest promotion rounds to date, with three lawyers being made up to partner globally: M&A specialist Nallini Puri in London, and litigation partner Abena Mainoo and regulatory partner Hugh Conroy in New York.
Closer to home DWF announced that it made up 2 insurance partners in London and Liverpool, with the rest of its promotions being made up across its Birmingham, Leeds, Newcastle and Manchester offices. Of the nine associates being made to partner this year, one third are women.
DAC Beachcroft also announced the promotion of four new partners, alongside nine that the firm made in May. This includes Professional risks lawyer Caroline Cherry in Bristol who joined the firm as a legal secretary, and injury lawyer Adrian Cottam and corporate partner Prakash Kerai who were made up in London.
See below for the promotion rounds in full:
Cleary Gottlieb Steen & Hamilton
Movers & Shakers of the week
Vodafone begins three-yearly review of the legal panel which supports its Group, Group Enterprise and UK legal teams
SocGen reaches final round of global panel review process
Technology company Smiths Group establishes its first ever legal panel, with Eversheds Sutherland, Freshfields Bruckhaus Deringer, Greenberg Traurig, Hogan Lovells, Linklaters and White & Case all suspected to have made it on to the panel
London Boroughs Legal Alliance (LBLA) panel drops two firms and gains seven new ones
Deutsche Bank appoints new global legal head
Former EMEA legal chief for Deutsche Bank Florian Drinhausen has been promoted to assume the bank’s chief compliance officer and head of global governance roles, as co-general counsels Christof von Dryander and Simon Dodds will be exiting the bank at the end of 2017 and 31 March 2018 respectively.
W&C Asia PE head joins City office
Peggy Wang, head of private equity for Asia at White & Case, has relocated from Hong Kong to London after joining the firm from Linklaters two years ago
Gibson Dunn boosts white-collar practice with SFO hire
In London, SFO prosecutor and case controller Sacha Harber-Kelly is set to join Gibson Dunn’s partnership, and will sit in the firm’s anti-corruption and bribery division
Tokyo managing partner Simon Black has left Allen & Overy to join battery storage startup BESS
DAC Beachcroft makes up four to partner
Latham & Watkins’ latest promotions round posts 31 global partner promotions, with two in the City
DWF promotes eight to its UK partnership along with first partner promotion in Australia