AMF Enforcement Committee fines an asset management company and its directors for breaches of their professional obligations

The Committee first held that Inter Gestion REIM had failed in its obligation to establish an appropriate and operational system for identifying and managing conflicts of interest, and to ensure that this was effective. In this respect, it noted in particular that its system for selecting service providers was deficient, that it had neither identified nor dealt with several proven or potential conflicts of interest, and that it had failed to provide clear, accurate and non-misleading information to all investors about the existence of these conflicts of interest or the payment of subscription fee retrocessions to certain investors. It also held that the company had failed to set up and maintain operational an effective and appropriate internal control mechanism, and a permanent and effective compliance function, that it had not published its conflict of interest policy on its website and that it had failed in its obligation to deal with any complaints received in a satisfactory manner.

The Committee then found that Inter Gestion REIM had failed in its obligation to establish an appropriate and operational procedure for valuing real estate assets. In particular, it was of the opinion that the procedural system put in place by the company was neither adequate nor operational, given the imprecise and incomplete nature of the asset valuation methodologies and internal valuation criteria, the absence of a methodology for calculating the net asset value of the funds, and the failure to periodically review the asset valuation policies and procedures. In addition, the committee noted a number of shortcomings in the implementation of this system and in the control of valuation.

The Committee also found that Inter Gestion REIM had failed in its obligation to establish an operational anti-money laundering and countering terrorist financing system and to ensure that this was effective, particularly with regard to the inadequacy of the due diligence carried out in respect of the assets and liabilities of the funds, and the lack of regular training for its staff.

Finally, the Committee held that the breaches committed by the company were attributable to Gilbert Rodriguez and Jean-François Talon.

An appeal may be lodged against this decision.

About the Enforcement Committee
The Enforcement Committee, which is made up of judges and professionals, has total freedom to make decisions. It can impose sanctions on any person or company whose practices contravene laws and regulations that fall within the jurisdiction of the AMF. It ratifies settlement agreements signed by the Secretary General and respondents. And it takes part in the AMF’s educational efforts by clarifying financial regulations when explaining its decisions.