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Newton, Artemis accused of sharing IPO data

Newton, Artemis accused of sharing IPO data

by Suzi Ring, Sarah Jones 29.11.2017 From our online archive
UK Financial Conduct Authority alleges four asset management firms shared price intentions
Findings will not necessarily lead to sanctions (Shutterstock)

(Bloomberg) Four asset management firms, including Newton Investment Management, were accused of sharing pricing information ahead of initial public offerings as the UK markets watchdog flexed its competition powers for the first time.

The UK Financial Conduct Authority (FCA) issued a so-called statement of objections against Newton, Artemis Investment Management LLP, Hargreave Hale Ltd. and River & Mercantile Asset Management LLP, the watchdog said Wednesday.

The complaint alerts firms that the FCA thinks they broke competition law and gives them the opportunity to respond before a final decision.

The FCA alleges the group shared information about the price they intended to pay in relation to a possible two IPOs and one placing before share prices were set.

That allowed firms to know each other’s plans during the process when they should have been competing for shares.

The FCA claims that in 2015 Newton, Hargreave and River & Mercantile shared information in relation to one IPO and a placing, while in 2014 Artemis and Newton discussed pricing in a second IPO.

Possible penalties

The regulator said the findings won’t necessarily lead to sanctions and the statement of objections are private.

A three-person panel called the Competition Decisions Committee will make the final decision on any penalties, but firms can appeal the ruling to the Competition Appeal Tribunal.

While the FCA can levy financial penalties as high as 10% of global revenue, antitrust regulators in the UK and European Union rarely issue fines that large. The FCA was given competition powers for the first time in 2015.

All four companies said they would continue to cooperate with the FCA.

Owned by Bank of New York Mellon Corp., London-based Newton oversees £55 billion (€62 billion) in assets.

Its former chief executive officer Helena Morrissey left the firm earlier year to join Legal & General Investment Management.

Privately owned Artemis is based in London and oversees £27.2 billion in assets, while River & Mercantile oversees £31 billion.

Hargreave was bought by Canaccord Genuity Group Inc.,earlier in the year for £52 million to expand its wealth management operations in the UK.

As of July, Hargreave managed about £8 billion for 14,000 clients.