The Financial Times reports that Gartmore's Roger Guy, co-head of the firm's flagship hedge fund, was critical of Gartmore's compliance rules when talking to investors last week about the suspension of colleague Guillaume Rambourg.
Rambourg was suspended after an internal investigation established that he was allegedly arranging for trades to be placed through specific brokers, which breaches the firm's guidelines, which are designed to ensure 'best execution' for share deals, and to prevent fund managers from playing favourites.
Guy told investors last week that his colleague has 'his full support', and described recent events as the worst period in his 20-year career. He also said: 'I didn't agree with the rule when it was introduced. I thought it was excessive'.
Bloomberg reports that Gartmore CEO Jeffrey Meyer has admitted that a number of people have indicated that they thought the firm had taken the matter to extremes by suspending Rambourg, who he confirmed: 'In my 5 years dealing with him has acted with a great deal of integrity and respect, and always puts the interest of his clients first'.
The news agency also quotes Joe Seet, a senior partner in hedge fund advisory firm Sigma Partnership, who said: 'Boards are usually afraid of star fund managers, especially if they're successful. It takes some guts to say the rules are the rules, no matter who you are'.
In the meantime, Reuters reports that Roger Guy has confirmed that he is staying put, and has no intention of resigning over the affair.
But The Daily Telegraph reports that Merrill Lynch, which advised Gartmore on its IPO just 3 months ago, is said to have told clients that it is unable to advise them on whether to buy or sell stock in the firm at present, and had placed its rating of Gartmore shares under review. And The Times reports that Hargreaves Lansdown, one of the UK's largest retail investment managers, has advised clients to avoid investing in Gartmore's Absolute Investment Fund until after the internal probe of Rambourg has been completed.
Gartmore has confirmed that there have been no material redemptions since details of the investigation became public. The firm's stock, which fell 31% Tuesday, recovered some ground Wednesday, and finished Thursday up another 12.8%.