An analyst/trader has been made to pay the price for much of the goings-on at Aviva Investors, the asset management arm of the Aviva empire, because he took advantage of the company's flawed administrative systems and remuneration structures.

Mothahir Miah of Luton has been fined £139,000 and prohibited from performing any function in relation to any regulated activity carried on by any authorised or exempt person, or exempt professional firm.

It was in February this year that the FCA fined Aviva Investors (which ended 2014 with assets under management of £246 billion and an operating profit of  £86 million) £17.6 million for systems and controls (SYSC) failings that led to its failure to manage conflicts of interest fairly. Between 2005 and June 2013 Aviva Investors failed to control the conflicts inherent in the management of funds that paid differing levels of performance fees on the same desk within its 'fixed income' business. The management of funds together in this way is referred to as ‘side-by-side’ management. The firm had an incentive structure that led side-by-side traders to favour funds that paid higher performance fees. This hurt its HNW customers and it had to pay compensation.

Between 2010 and 2012 Miah was qualified to perform 'controlled function 30, (CF30, regarding customers). He was allowed to trade on behalf of hedge funds and long-only funds (funds managed with the strategy of only taking long, rather than short, positions) but, because of weaknesses in the trading systems and controls, he was able to delay the moments when he booked and recorded the allocation of trades.
 
He often exploited these loopholes by deliberately delaying the booking and allocation of trades in order to assess their performance and then allocate trades that benefited from favourable intraday price movements to hedge funds that paid performance fees, and trades that did not to certain long-only funds that paid lower or no performance fees. This practice is commonly known as ‘cherry picking’. His actions, which he knew were dishonest, contributed to Aviva Investors having to pay significant compensation to a number of long-only funds.