Sector developments and company hires

Disclosure charges settled
BlueCrest Capital Management has agreed to pay US$170m to settle US SEC charges concerning inadequate disclosures, material misstatements and misleading omissions. These charges concern the firm’s transfer of top traders from its flagship client fund, BlueCrest Capital International (BCI), to BSMA Limited, a proprietary fund, and replacement of those traders with an underperforming algorithm. The SEC’s order finds BlueCrest in violation of antifraud provisions of the Securities Act of 1933, Investment Advisers Act of 1940 and the Advisers Act’s compliance rule.

BlueCrest did not disclose the reallocation of the transferred traders’ capital allocations in BCI to a semi-systematic trading system. This trading system was a replication algorithm that tracked trading activity of a subset of BlueCrest’s live traders. The firm is alleged to have kept more of any performance fees generated by the algorithm than by live traders.

In other news…

ABS CDO transferred
Dock Street Capital Management has replaced Duke Funding Management as collateral manager to Duke Funding X. Moody’s has determined that the move will not adversely impact any of its current ratings on secured notes issued by the ABS CDO. For more CDO manager transfers, see SCI’s database.

EMEA
Arcmont Asset Management has recruited Christian Roessling as head of DACH business development, based in Munich, Germany. He was previously associate director, business development Germany & Austria at Barings in London. Before that, Roessling worked at Deutsche Bank and Commerzbank.

Mark Mearing-Smith has joined Jefferies’ CLO structuring team in London. He was previously vp at NatWest Markets and has also worked at Trepp and Codean.

Uplift for Chinese auto ABS
Moody's has upgraded the ratings on 13 notes issued by nine Chinese auto ABS, following the upgrade of China's local currency country ceiling to Aaa from Aa3. The rating actions reflect the impact of: the revised local currency country ceiling for China; the level of financial disruption risk in the transactions; the presence of sufficient credit enhancement to the notes; and the performance of the securitised auto loans and leases.