GAM Asks ‘Who Paid for That Lunch?’ as Gift Violations Emerge

(Bloomberg) -- GAM Holding AG found that employees have breached its gift policy in the wake of a scandal that led to the dismissal of star bond manager Tim Haywood, a sign that misconduct may have been more widespread than previously disclosed.

Sales staff have been asked to log all the hospitality they received for the last three years, according to memos seen by Bloomberg News. U.K.-based employees in sales & distribution were told to go through their diaries to identify any coffees, breakfasts, lunches and dinners they received since the beginning of 2016.

GAM Asks ‘Who Paid for That Lunch?’ as Gift Violations Emerge

"It has become apparent that people are not following the company’s policies in relation to gifts and entertainment, which means individuals are breaching protocol," according to one memo from October.

A spokesman for GAM said the company does not comment on internal processes.

Among the charges leveled against Haywood last year was that he breached the company’s gifts and entertainment policy and circumvented a rule that requires two signatures to make an investment. The episode raised concerns about oversight and saw assets under management at the firm slump by 26.5 billion francs last year. Haywood was dismissed last month for gross misconduct and has said he plans to appeal.

Data Input

The huge task of retroactively logging meetings held in previous years shows the lengths to which GAM is going to move past a scandal that caused it to liquidate a strategy with around $7 billion in assets. In a separate memo by Tim Rainsford, the company’s head of sales and distribution from November 2018, GAM said it had arranged for two data entry personnel "to be engaged to sit with the finance team and input all historic expense reimbursements."

In the aftermath of the liquidation, GAM said it had strengthened its policies and procedures, such as training on conflicts of interest including gifts and entertainment, and boosting its two-signatory policy for investments.

Consequences of infringing the company’s gifts policy are forfeiture of the gift to charity, disciplinary action including potential dismissal for gross misconduct, or legal action.

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