The AMF Enforcement Committee fines a portfolio asset management company and its manager for breaches of their professional obligations

After dismissing the procedural arguments raised by the respondents, the Enforcement Committee upheld three series of breaches.

The first series of breaches concerned the portfolio asset management company's compliance with the conditions of its authorisation with regard to its human resources. The Enforcement Committee found that, contrary to the terms of its authorisation, Melanion Capital did not have effective management in France, nor did it comply with the requirement to be managed by two persons, further to the departure of its second manager who had been responsible for risk. In addition, the Committee found that the portfolio asset management company had not declared to the AMF and sought its authorisation for the change in the terms of its authorisation at the time of the departure of its second manager.

The second series of breaches related to the portfolio asset management company's risk management system. The Committee found that Melanion Capital had a disorganised, inappropriate and non-operational risk management procedure, incomplete risk mapping, and insufficient risk monitoring and management system. It also found that the company had neither implemented nor maintained effective, appropriate and documented internal control mechanisms or an effective and permanent compliance function.

The third series of breaches concerned the anti-money laundering and combating the financing of terrorism (AML/CFT) system. The Committee deemed that the portfolio asset management company's procedural system was deficient and that Melanion Capital had not carried out any checks on its service provider in charge of the AML/CFT diligences. Lastly, the Committee found that the company had failed in its obligation to act honestly and loyally with the skill, care and diligence required in the conduct of its activities, since it had provided incorrect answers to AMF anti-money laundering questionnaires.

The Committee found that all of the breaches held against Melanion Capital were attributable to its manager, Mr Jad Comair.

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.