LONDON (Reuters) - Aviva Investors Global Services has paid out 150 million pounds in fines and compensation after failing to control conflicts of interest, Britain's markets watchdog said on Tuesday.
The Financial Conduct Authority (FCA) said it fined Aviva Investors 17.6 million pounds for systems and controls failings spanning eight years to June 2013.
"These weaknesses led to compensation of 132 million pounds being paid to ensure that none of the funds Aviva Investors managed was adversely affected," the FCA said.
Aviva Investors, which manages 240 billion pounds on behalf of customers, used a management strategy whereby funds that paid different levels of performance fees were managed by the same trading desk. Some of the fees were paid to traders who managed the funds.
"This type of incentive structure created conflicts of interest as these traders had an incentive to favour one fund over another," the FCA said.
Aviva Investors, part of Aviva insurance company, said it cooperated fully with the FCA over the breaches.
"We fully accept the conclusions of this investigation," Euan Munro, chief executive of Aviva Investors, said in a statement. "We have fixed the issues, improved our systems and controls and ensured no customers have been disadvantaged."
The FCA said Aviva worked with the watchdog in an "exceptionally open and cooperative manner" and qualified for a 30 percent discount to its fine because of early settlement.