SIX confirms fine on GAM Holding AG is final and legally binding
GAM Holding AG has accepted the decision of the Sanctions Commission of SIX Swiss Exchange and has waived its right to appeal.
Further to its decision from January 2020 to impose a fine of CHF 400,000 on GAM Holding AG for breaching IFRS accounting standards, the Sanctions Commission of SIX Swiss Exchange today confirms the fine is final and legally binding.
SIX explains that, following the announcement of the fine, GAM Holding AG has accepted the decision of the Sanctions Commission and has waived its right to appeal.
The fine is related to GAM’s acquisition of Cantab Capital Partners. In particular, it was claimed that GAM Holding AG had failed to recognize a financial liability in the consolidated balance sheet of the 2017 IFRS annual financial statements. Furthermore, GAM Holding AG had not included the effects of the revaluation of the financial liability in the consolidated income statement of the 2017 IFRS annual financial statements.
In connection with the acquisition of Cantab Capital Partners, GAM Holding entered into a contractual obligation to pay a share of future performance fees to the previous owners for an indefinite period of time. GAM Holding AG did not recognize this contractual obligation as a financial liability at the acquisition date and at subsequent balance sheet dates. Instead, GAM Holding disclosed it as a contingent liability.
The Sanctions Commission has determined the obligation in question as a financial liability under IFRS accounting standards, which must be recognized in the balance sheet and remeasured at each reporting date. The Sanctions Commission qualified the breach of the applicable IFRS rules as a significant violation that was committed negligently.
As a result, the Sanctions Commission imposed a fine of CHF 400,000 on GAM Holding AG. The decision of the Sanctions Commission is now final and legally binding given that GAM Holding AG has waived its right to appeal.