The UK fund manager Gartmore has been fined around $1.34 million by the Securities and Exchange Commission for “wilfully” violating a rule which prohibits selling a stock short prior to a public offering, then going on to purchase the same security in the offering.

The violation was in relation to actions by Gartmore’s US hedge fund AlphaGen RhoCas, which short-sold shares in BB&T and then went on to purchase them in a public offering. 

The fine consisted of a civil money penalty of $375,000, disgorgement of $928,117.83, and prejudgment interest of $44,134.68 to the US Treasury.

“At the time of the violation, Gartmore had no policies, procedures or controls in place designed to detect or prevent Rule 105 violations,” according to the US regulator.

The fine comes at a difficult time for the investment manager, which has recently suffered some key staff departures and has also announced it will cut its UK headcount by around 10 per cent as part of a cost-cutting programme.