Key Takeaways
- • A London judge found two Man Group subsidiaries liable in a corruption case involving Kuwait's Public Institution for Social Security (PIFSS), with a potential payment of approximately $155m, according to a Bloomberg report.
- • Man Group shares fell as much as 5.9% following the ruling, which followed a year-long civil trial.
- • Judge Richard Jacobs found two former Man Group employees knew an intermediary was paying bribes to former PIFSS director general Fahad al Rajaan; the final amount remains subject to a November hearing and settlement adjustments.
- • The judge criticised a past internal compliance review, conducted while current CEO Robyn Grew was global head of compliance, for confirmation bias, though Grew was not directly criticised.
- • Man Group disputes the findings, calling the matter a legacy case tied to a contract terminated more than 30 years ago, and is evaluating options including an appeal.
Summary
Man Group faces a potential $155m payment after a London judge found two of its subsidiaries liable in a corruption case involving Kuwait's state pension fund, according to a Bloomberg report. The company's shares fell as much as 5.9% following the ruling.
The decision concludes a year-long civil trial into allegations that Fahad al Rajaan, former director general of the Public Institution for Social Security (PIFSS), received illicit payments from financial institutions seeking investment mandates. The wider scheme allegedly diverted approximately $1bn from the pension fund over several decades.
Judge Richard Jacobs found that two former Man Group employees were aware that an intermediary was paying bribes to al Rajaan, making the two subsidiaries liable alongside other defendants. The court indicated PIFSS could recover approximately $155m from Man Group, though the final figure remains subject to a further hearing in November and adjustments tied to settlements reached with other parties.
The proceedings also examined an internal compliance review conducted during the tenure of current chief executive Robyn Grew as global head of compliance. The judge criticised the review for confirmation bias after it cleared the individuals involved and allowed the relationship with the intermediary to continue. Grew was not directly criticised.
Former Man Group Middle East head Antoine Massad was found personally liable, with the judge concluding he knowingly participated in the bribery arrangements. Former chairman Lord Stanley Fink gave evidence supporting Massad's character, but the court rejected Massad's account of events.
Man Group disputed the ruling, describing the case as a legacy matter relating to a contract terminated more than 30 years ago. The firm said the findings did not reflect its business practices and confirmed it is evaluating its options, including a potential appeal.
The decision concludes a year-long civil trial into allegations that Fahad al Rajaan, former director general of the Public Institution for Social Security (PIFSS), received illicit payments from financial institutions seeking investment mandates. The wider scheme allegedly diverted approximately $1bn from the pension fund over several decades.
Judge Richard Jacobs found that two former Man Group employees were aware that an intermediary was paying bribes to al Rajaan, making the two subsidiaries liable alongside other defendants. The court indicated PIFSS could recover approximately $155m from Man Group, though the final figure remains subject to a further hearing in November and adjustments tied to settlements reached with other parties.
The proceedings also examined an internal compliance review conducted during the tenure of current chief executive Robyn Grew as global head of compliance. The judge criticised the review for confirmation bias after it cleared the individuals involved and allowed the relationship with the intermediary to continue. Grew was not directly criticised.
Former Man Group Middle East head Antoine Massad was found personally liable, with the judge concluding he knowingly participated in the bribery arrangements. Former chairman Lord Stanley Fink gave evidence supporting Massad's character, but the court rejected Massad's account of events.
Man Group disputed the ruling, describing the case as a legacy matter relating to a contract terminated more than 30 years ago. The firm said the findings did not reflect its business practices and confirmed it is evaluating its options, including a potential appeal.
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