Legal & General Whistle-Blower Says Fund Retaliated Against Him

(Bloomberg) --

A former senior fund manager at Legal & General Group Plc said that the British asset manager retaliated against him after he blew the whistle on "market abuse" and conflicts of interest among managers.

Shahzada Omar Saeed, who managed a number of debt funds for Legal & General, said he was forced to resign last month and is bringing a whistle-blowing claim in a London court. Fund managers on the fixed-income team were trading ahead of each other on new bond issues at the expense of clients, he said, and when he warned executives he was "unfairly penalized and picked on."

Regulators at the Financial Conduct Authority have placed whistle-blowing, and the protection of those raising the alarm, at the heart of efforts to avoid misconduct and scandals since the financial crisis. But at Legal & General, whistle-blowers were seen to be divisive, Saeed said, comparing his treatment with a case involving Barclays Plc Chief Executive Officer Jes Staley, who was fined for attempting to unmask an employee.

"I believe that attitude, which is clearly a deeply-felt institutional attitude, places serious question marks around the regulatory fitness and propriety under FCA rules" of the company's senior staff, Saeed said in a filing for a court hearing earlier this week.

Legal & General properly investigated Saeed's concerns, the firm said in a court filing. The probe "revealed areas in which there was room for improvement," Legal & General said, but "there was no suggestion of any unlawful or improper or otherwise sinister activity."

The 1 trillion-pound ($1.3 trillion) asset manager said in a statement that it told the FCA of the complaints and "kept them fully informed throughout."

"We do not accept the allegations made and we believe that the picture presented of our culture is not one recognized by our employees or our clients," the firm said.

Performance

Saeed, who ran funds including the Dynamic Bond Trust, was a poor performer who was likely to have been fired anyway, the firm said. "Rather than reflect upon his responsibility for his fund's poor performance, he chose to attack co-workers," Legal & General said.

But Saeed argued that his performance was "reasonably good," noting that his fund had been in the top quartile in 2015, before it dipped in 2016 and recovered the following year. The fund manager, who started in February 2015, was on a base salary of 157,000 pounds.

The atmosphere within the Active Fixed Income team was "toxic," a Legal & General manager found while investigating Saeed's complaint, according to Saeed's court filing. The fund manager also named Anton Eser, the firm's chief investment officer, as well as manager Colin Reedie, and colleagues Uday Patnaik and Julien Houdain as defendants in his employment claim.

Saeed said in the court filing that he was "bullied and micromanaged" by Eser. The company said it rejected his complaints of bullying conduct.

"I was subjected to mockery and name calling by other members of the team, including repeatedly being called Anton's secretary," Saeed said. The fund manager also said he was subjected to "obscene hand gestures mocking the fact that I was being screwed by Anton."

Saeed "has built his career in an environment where success is well rewarded and failure is commonly met with a swift move towards termination of employment," Legal & General said.

To contact the reporter on this story: Jonathan Browning in London at jbrowning9@bloomberg.net

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser, Keith Campbell

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