They said the FCA estimated the redress sum to be more than $700 million but that the regulator's penalty decision notice demonstrated "muddled thinking", a decision dated June 21 showed.
However, the FCA has also proposed fining the former hedge fund 41 million pounds ($52 million) in 2021 for conflict of interest failings over a fund set up for BlueCrest staff.
BlueCrest said it welcomed the decision to strike out the proposed redress case and that it would continue to defend its position vigorously.
The FCA has said BlueCrest failed to manage fairly a conflict of interest created by switching portfolio managers working on a fund open to investors outside BlueCrest to an internal fund open to partners and employees, leading to "substandard" client service between 2011 and 2015.
($1 = 0.7853 pounds)Reporting by Kirstin Ridley; editing by Diane CraftOur Standards: The Thomson Reuters Trust Principles.
Persons:
Michael Platt, BlueCrest, Kirstin Ridley, Diane Craft
Organizations:
BlueCrest Capital Management, Financial, Authority, Thomson
Locations:
London, BlueCrest