French property investment portfolio firm Foncière Magellan has been fined by the AMF for multiple breaches of credit transaction regulations, including activities it was not approved to perform due to conflict of interest, and for not having adequate processes to identify, prevent and managing conflicts of interest.
The AMF Committee identified that Foncière Magellan had routinely executed credit transactions on behalf of the real estate funds it managed, and that they had not complied with its programme of operations and, even more so, the conditions of its licence after noting that Foncière Magellan’s authorisation did not permit it to carry out such a activities.
The Committee highlighted that the transactions had been performed 50 times for a total of €69.8 million as proof of the severity of this infraction.
The Committee also believed that Foncière Magellan had failed to recognise and resolve two instances of conflict of interest involving the signing of contracts between the funds it oversaw and businesses it was affiliated with financially or that were a part of its group. According to the Committee, Foncière Magellan was in breach of its duty to maintain an effective procedure for recognising, avoiding, and managing conflicts of interest.
It is expected and an appeal will be lodged against the AMF decision.