Dr. Wolfgang Flottl's business empire -- recently laid off a team of traders, the Royal Gazette has learned.

"We have let some people go. A small change in personnel,'' said Mr. David Prance, controller at RCM.

"Nothing is changing from the perspective of our business. This is part of the normal internal workings of the company which continues to operate and is still liquid. We still have autonomous trading teams,'' he added.

One source said RCM could have let go as many as four or five traders and noted at the height of operations the company could have been running with five teams.

But Mr. Prance would not comment on how many securities traders were impacted.

This is not the first group to be let go from the company, commonly referred to as a hedge fund company, trading in derivative instruments, but Mr. Prance alluded there have been new trading teams brought in the past.

Mr. Flottl declined comment Monday.

"Mr. Flottl would not normally comment on internal policy,'' Mr. Prance said yesterday, noting he had spoken to Mr. Flottl about the inquiry from The Royal Gazette .

Among other prominent investment companies in Bermuda, Trout Trading Management Ltd., with offices in the Washington Mall, declined comment on whether or not they had impacted by the changing investment climate and been forced to cut their number of traders.

"Trout is a small private operation and does not comment on a (staffing) issue,'' said Mr. Turner Swan, attorney for the company, which primarily deals in commodities.

Publicly-held Strategic Asset Management Ltd. (SAM), which has $6 billion in derivatives assets, is expanding amid a "bruised environment,'' according to director Mr. Darren Davey.

Bermuda's hedge fund companies have weathered recent derivatives debacles, according to Mr. Davey.

"The industry has been cut back. There has been a contraction in the industry but Bermuda has been isolated from it,'' he said.

"We tend to hear about the 20-30 percent of companies that lost money, the five percent who experienced disasters and not about those who hold their own or do well,'' he said, adding that almost all of Bermuda's investment managers continue to do well or hold their own in the derivatives environment.

Losses from derivatives investing is not the fault of the derivative, rather, the blame lies on the shoulders of an investment manager. A key to derivatives investing is understanding their usefulness and the level of risk -- sometimes very small -- associated with them, according to Mr. Davey.

Currently none of the Island's investment management company's have members in the Bermuda Association of Securities Dealers (BASD), reports Mr. Bob Richards, chairman of BASD, and president of Bermuda Asset Management.

"We are in the process of expanding our scope to include all investment firms, local and exempted. This is in the discussion stage at the moment,'' said Mr. Richards.