Amvescap in £200m-plus payout

ANGLO-AMERICAN fund manager Amvescap has agreed to pay out more than £200m of compensation and fines to settle a long-running market abuse case in the US.

It will hand over £121m compensation to customers of its Invesco division who suffered as a result of so-called market timing abuses and it has also been fined £62m. Aim, another of its American subsidiaries, will pay a further £28m.

The legal action was brought by Colorado attorney general Ken Salazar, though the settlement also covers pending litigation with New York State and the US Securities & Exchange Commission.

Amvescap was accused of allowing a handful of privileged US customers - including hedge funds - to make improper mutual fund trades running into billions of pounds from which some clients reaped bumper profits.

'We deeply regret the harm done to fund investors and have taken strong measures to prevent any recurrence,' said Amvescap chairman Charles Brady.

The penalty is the largest ever levied on a single firm under the US authorities' purge on mutual funds. The clampdown has resulted in a total of £1.6bn in fines and compensation.