Decision maker 

FCA Settlement Decision Makers

Subject

Mr Jean-Noel Alba 

Related decisions

H2O AM LLP, 2 August 2024

Sanction

Fine: £1,049,500 including 30% settlement discount (based on 30% of his relevant income over the 23 month period of the breach and increased by 10% to reflect the aggravating factors of lack of co-operation and remediation); and

Prohibition: any function in relation to any regulated activities

Provisions

Statement of Principle 1 and Individual Conduct Rule 1 (Integrity)

Statement of Principle 4 and Individual Conduct Rule 3 (Open and co-operative) 

Relevant period

1 August 2019 to 22 July 2021 (c. 2 years)

Factual findings

Mr Alba co-founded the asset management company H2O AM LLP (H2O); held various roles including CCO and was responsible for overseeing compliance and risk (with approval to perform CF4 and CF10 and then SMF27 functions).

H2O acted as authorised fund manager for a number of funds and, between 2015 and 2019, made investments through the funds into 24 entities controlled or introduced by a certain individual.

In June 2019, the FT published an article focusing on the exposure of H2O funds to these investments and the close relationship with the individual. This prompted significant investor redemptions.

The FCA commenced an investigation into H2O and made a number of information requests. In response to these, Mr Alba:

• oversaw the retrospective creation of multiple governance documents including minutes of meetings, many of which had not taken place and amending contemporaneous documents to add more details; 
• provided misleading due diligence reports on the basis that they had been prepared at the time of the investments as part of the due diligence process when he knew or ought to have known this was not the case, including because he was told that documents were being created after the event. The FCA also reviewed a WhatsApp group chat for H2O Exco members which included a message received by Mr Alba informing him that his statement to the FCA that the reports had been written at the time of the investments was inaccurate and other references to documents being created; 
• made misleading statements to the FCA regarding the nature and extent of due diligence H2O had conducted and then failed to correct these.

In 2021 H2O identified these matters and suspended Mr Alba.

In August 2024, the FCA issued a Final Notice to H2O regarding due diligence failings in connection with the investments and the provision of misleading information to the FCA, referring to Mr Alba as Senior Manager A.

Failings

The FCA concluded that it appeared Mr Alba was seeking to create the impression that H2O had held and documented detailed discussions regarding the investments before making them and to hide the fact that he had made inaccurate statements to the FCA and the severity of H2O’s due diligence and systems and controls failings. 

The FCA determined that Mr Alba had failed to:

• act with integrity in breach of Statement of Principle 1 and then, from December 2019, Individual Conduct Rule 1;
• be open and co-operative with the FCA in breach of Statement of Principle 4 and then, from December 2019, Individual Conduct Rule 3;
• demonstrate a readiness and willingness to comply with the requirements and standards of the regulatory system and was therefore not fit and proper.