L&G suspends 14 in unit trust probe

LEGAL & General has suspended 14 managers and other staff in its unit trust administration department during an investigation into whether there has been a breach of the rules on personal investment in L&G funds.

No customers' money is involved, L&G said. The investigation centres upon the personal trading accounts of staff at Portfolio Management Services, the Cardiff-based 'back office' which handles orders to buy and sell unit trusts.

Portfolio Management Services staff are allowed to invest in L&G funds, but questions have arisen over a total, thought to be about £20,000, which staff may have made in ways that may breach L&G internal guidelines. For example, there must be no arbitraging against indices, knowing what the closing prices are.

The Financial Services Authority has been informed of the inquiry.

L&G said: 'The focus of the investigation is the employees' record of personal investment in Legal & General Funds and whether that is in accord with internal rules and procedures - the investigation does not involve customer administration, and no customer money is at risk.'