GAM's internal investigation has found that absolute return bond funds chief Tim Haywood may have failed to carry out due diligence and make internal records accessible, broke the rules on gifts and entertainment, and may have breached the firm's signatory policy.
The company announced these findings in a new FAQ page devoted solely to Haywood's suspension and the ongoing state of the absolute return bond funds.
Specifically, the statement noted that Haywood appears to have signed contracts alone when two signatures were required, did not ask for pre-approval regarding gifts and entertainment and used his personal email for work purposes.
The firm stated that it 'found no evidence that Haywood was motivated by an improper rationale in making investment decisions or that there was any conflict of interest between him and clients' and that he remains an employee of GAM until further notice.
According to a report from The Times, traders at GAM tried to sell off parts of the absolute return bond funds portfolio just days before Haywood's suspension was announced.
However, following the suspension, GAM announced that it would be freezing all subscriptions and redemptions in its absolute return bond funds, which held CHF 7.3 billion in assets under management as of 31 July.
GAM said: 'The funds have the necessary liquidity to serve the redemption requests we have received, but such actions would lead to a disproportional shift in their portfolio composition, which could compromise the interests of remaining investors.
'We are working with the fund boards to consider all future options, including fund liquidations. Our priority is to provide liquidity and maximise value for clients in a timely manner. We hope to be able to resolve the situation as soon as practicable.'
According to GAM, there has been no client detriment to date as a result of Haywood's actions.
The funds are being taken over by investment directors Jack Flaherty and Alex McKnight.