SEC Orders BlueCrest to Pay $170 Million to Harmed Fund Investors

The Securities and Exchange Commission today announced that UK-based investment adviser BlueCrest Capital Management Limited has agreed to pay $170 million to settle charges arising from inadequate disclosures, material misstatements, and misleading omissions concerning its transfer of top traders from its flagship client fund, BlueCrest Capital International (BCI), to a proprietary fund, BSMA Limited, and replacement of those traders with an underperforming algorithm. The SEC will distribute the $170 million to harmed investors. According to the SEC’s order, BlueCrest created BSMA to trade the personal capital of BlueCrest personnel using primary trading strategies that overlapped with BCI’s. As set forth in the order, members of BlueCrest’s governing body, which made the relevant decisions regarding BSMA, had a 93 percent ownership interest in BSMA that peaked at $1.79 billion compared to its ownership interest of approximately $619 million in BCI.