Legal & General Investment Management (LGIM) has been reported to the regulator by a number of its employees under whistleblower rules amid claims of a risk culture reaching "crisis levels" and a series of compliance failures, according to reports.
According to the Financial Times, at least three LGIM employees have said there are issues with the firm's risk culture which starts with senior management.
The complaints were all submitted to the Financial Conduct Authority (FCA) against LGIM, which runs $1trn in assets under management for clients, in recent weeks under whistleblower rules.
One of the whistleblowers said in his complaint: "I feel obligated to report these issues now because I feel the risk culture of LGIM has become so toxic that it is reaching a crisis level.
"Investors in Legal & General and LGIM products, many of them UK retail investors, are having their savings and investments put at risk by the current toxic risk culture," according to the documents seen by the FT.
Furthermore, according to the complaints, there was a failure by one of the firm's team to report trading errors involving the duration of several funds being miscalculated by analysts resulting in poor execution, including one alleged mistake which resulted in multi-million pound losses for a retail investment trust.
According to the document, this was looked into by the firm after being raised by its internal whistleblowing procedures however, provisional findings, dating 23 March, said there was evidence this "error, or potential error, was not reported as required by LGIM's errors and compensation and risk management policies".
There was also evidence of two other errors which were not followed up properly by the risk management team, one with an incorrect transaction for the UK's largest pension fund USS.
The findings showed a staff member responsible for one of the errors failed to report it to the fixed income team and instead made two trades to correct the portfolio duration.
The individual was challenged by management but senior bosses did not report it to the risk department, according to the document.
LGIM said to the FT it does not comment on individual performance, disciplinary or whistleblowing activities. "However, we take these issues very seriously, and in the months since these allegations were first made we have been conducting a full investigation using external advisers," it added.
The FCA declined to comment.