GAM bought Cantab Capital Partners three years ago for $217 million (169 million pounds), plus deferred consideration, part of the Swiss company's efforts to diversify and add $4 billion in assets.

SIX Swiss Exchange said GAM Holding's deal with Cantab -- leaving 40% of future performance fees retained by Cantab partners -- produced a financial liability that the Swiss company should have recorded at the time of the acquisition, not delayed until the performance fees actually materialise.

"It is SIX Exchange Regulation AG's view that financial liabilities are understated in the balance sheet of the 2017 annual financial statement ... and that a potentially significant revaluation effect has not been recognised in the income statement," SIX Exchange Regulation said in a statement.

GAM said in response it disagreed with the position taken by SIX and said it stood by its previously published consolidated financial statements.

"GAM’s position, supported by its external auditors and an independent expert, is that no financial liability should be recognised until performance fees crystallise," the Swiss asset manager said. "GAM believes that this reflects a true and fair view of its financial position."

GAM said that if it is forced to address the accounting matter in its next consolidated financial statement it would have no impact on its cash flow position.

GAM shares opened 1.1% lower and have fallen 84% over the past two years, as the company has seen assets under management take a hit following the sacking of a former star manager it had accused of breaching company rules.

Performance fees due Cantab employees in the first five years after the deal were capped at $50 million, according to GAM's 2018 full-year financial results presentation.

GAM on Wednesday did not immediately specify the possible dimensions of the liability if the sanctions are upheld.

By John Miller