Article: Tech and Crime Series: Has the FCA bitten off more than it can chew with its NatWest Prosecution?

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Tech and Crime Series: Has the FCA bitten off more than it can chew with its NatWest Prosecution?

Thomas Cattee, 13 April 2021

News broke on Tuesday 16 March 2021 that the Financial Conduct Authority (the “FCA”) has started criminal proceedings against NatWest Bank (“NatWest”) for alleged offences relating to the adequacy of procedures in place to prevent money laundering.

These proceedings are in respect of offences under the Money Laundering Regulations 2007 (the “2007 Regulations”). It is alleged that between 11 November 2011 and 19 October 2016 NatWest failed to adhere to the requirements of regulations 8(1), 8(3) and 14(1) of the 2007 Regulations. Continue reading “Article: Tech and Crime Series: Has the FCA bitten off more than it can chew with its NatWest Prosecution?”

Article: Ex-Trader Sues RBS For £1.1M In Unpaid Bonuses

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Ex-Trader Sues RBS For £1.1M In Unpaid Bonuses

Joanne Faulkner, 12 April 2021

A former Royal Bank of Scotland trader is suing the lender for more than £1.1 million ($1.5 million), claiming he is being denied promised bonuses after being unlawfully dismissed during a regulatory investigation into the Libor rate-rigging scandal.

Arif Hussein, former managing director of a trading division, argues in a High Court claim that has recently been made public that RBS has wrongfully classified his firing from the lender in 2014 as “for cause.” This came despite an employment tribunal determining he had been unlawfully dismissed a year later, the claim added. Continue reading “Article: Ex-Trader Sues RBS For £1.1M In Unpaid Bonuses”

Article: Concerns over insider trading mount

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Concerns over insider trading mount

Leanna Reeves, 08 April 2021

Insider trading must be tackled by regulators to provide a fairer market for small shareholders, particularly since the pandemic caused record levels of retail trading accounts, says Mohammed Rharrabti, senior business analyst at Natixis.

“You can go to a forum and see many people exchange about their trade and shares. If you’re a small shareholder, you will have the opportunity to see all the moves. If you see something gaining 20 percent in a day it could be because of the news and so on, but there will be people that have taken this position 10 days before. This is not normal.” he says. Continue reading “Article: Concerns over insider trading mount”

Article: THE POTENTIAL DOMINO EFFECT OF GAMESTOP

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THE POTENTIAL DOMINO EFFECT OF GAMESTOP

Lawyer Monthly, 07 April 2021

The GameStop saga stopped the stock market in its tracks earlier this year, with wealthy hedge funds losing millions of pounds. The move was orchestrated on a subreddit thread, with vast numbers of average investors joining forces to push up the share price.

No one can deny the effect was tumultuous. However, what isn’t so clear is what will happen in the longer term. The legalities of the subreddit crowd are still in question, yet there’s no guarantee that it won’t happen again. Continue reading “Article: THE POTENTIAL DOMINO EFFECT OF GAMESTOP”

Article: Financial Crime Reporting Rules Extended To Cryptoasset Firms

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Financial Crime Reporting Rules Extended To Cryptoasset Firms

Kevin Pratt, 31 March 2021

The UK’s financial regulator, the Financial Conduct Authority (FCA), has announced a shake-up of its anti-money laundering activities which will see firms dealing in cryptoassets obliged to file annual reports on their trading activities.

The FCA will use the information to determine the potential risk of financial crime, enabling it to target its supervisory resources where it identifies the greatest risk.

Cryptoasset ‘exchange tokens’ such as Bitcoin, Litecoin, Ether and other virtual currencies are only regulated in the UK for money laundering purposes. This means that you have little or no protection if something goes wrong and, as the FCA points out, you should be prepared to lose all the money you invest. Continue reading “Article: Financial Crime Reporting Rules Extended To Cryptoasset Firms”

Article: FCA comes down on Wirex after allegations of turning a blind eye to money laundering

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FCA comes down on Wirex after allegations of turning a blind eye to money laundering

Aisling Finn,  30 March 2021

The Financial Conduct Authority (FCA) has decided to crack down on crypto and fiat currency payments provider Wirex after money laundering allegations surfaced, according to an investigation by Fintech Futures.

In response to the article, Wirex’s legal team said: “The article in question contains a number of false, defamatory and misleading statements, including the allegations that money is being laundered through the company, and Wirex is currently considering its legal options to have the article removed immediately.”

Concerns were allegedly first raised all the way back in February 2019 after several Wirex employees independently approached the FCA with concerns that customer money was being laundered through the company, according to the report by Fintech Futures.

The employees, one of which was in a senior compliance position, also reportedly raised concerns that Wirex was trading crypto that wasn’t the company’s to trade. Continue reading “Article: FCA comes down on Wirex after allegations of turning a blind eye to money laundering”

Article: Investment fraud reports 32% leap as criminals exploit covid-19

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Investment fraud reports 32% leap as criminals exploit covid-19

Mark Battersby,  26 March 2021

Investment scam reports surged by almost a third (32%) during 2020, with losses to these scams increasing 42% to £135.1m, according to a report by trade body UK Finance.

So called ‘authorised’ fraud losses increased 5% in 2020 to £479m as scammers ramped up online activity during the pandemic, its latest Fraud the Facts report stated. Unauthorised fraud losses dropped 5% as lockdown restrictions forced criminals to switch tactics, but were still very high at £784m, the latest Fraud the Facts report also revealed.

It cannot be right that online firms are effectively profiting from fraud, while society as a whole pays the price.”
Impersonation scam cases almost doubled to nearly 40,000 cases during the year.

The shocking figures show why tackling scam activity, particularly online, needs to be prioritised across Government, UK Finance argued in the report.

UK Finance is specifically calling for fraud to be included in the scope of the government’s Online Safety Bill to better protect consumers from these scams.

This would ensure that online platforms such as social media firms, search engines and dating websites take action to address vulnerabilities in their systems that are being exploited by criminals to commit fraud.

Katy Worobec, managing director of economic crime at UK Finance, said: “The banking industry has worked hard throughout the pandemic to protect customers from fraud and to go after the criminals behind it, with over £1.6 billion of fraud stopped in 2020.

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Article: The Legal and Economic Implications from Recent UK Spoofing Cases

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The Legal and Economic Implications from Recent UK Spoofing Cases.

Yan Cao, Marlene Haas, Greg Leonard, 23 March 2021

The UK Financial Conduct Authority (“FCA”)[1] has in recent years intensified its efforts in securities and commodities markets to detect and pursue the type of disruptive trading behaviour called “spoofing.” This emphasis coincides with a similarly increasing focus by the US Commodity Futures Trading Commission (“CFTC”) and the US Department of Justice (“DOJ”) on spoofing cases in the US. Spoofing may take different forms, but usually involves the placing of non-bona fide orders, often of large quantity, on one side of the market while trying to execute a bona fide order on the other side of the market. Once the bona fide order has been executed, the trader cancels the non-bona fide orders quickly. To date, more than 40 enforcement actions targeting spoofing have been filed against individuals and companies by US regulators and more than 5 have been filed by UK regulators. In February 2019, Julia Hoggett, the FCA’s Director of Market Oversight, delivered a speech about the FCA’s commitment to tackling market abuse, calling compliance with such rules “critical to the integrity and health of our financial markets.” Continue reading “Article: The Legal and Economic Implications from Recent UK Spoofing Cases”

Article: Hargreaves Lansdown faces legal action over Woodford fund

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Hargreaves Lansdown faces legal action over Woodford fund

Pedro Gonçalves,  22 March 2021

RGL Management has formally launched legal action against Hargreaves Lansdown, which continued to recommend Woodford Equity Income to its clients right up until its suspension in June 2019, even though its analysts raised concerns in 2017.

RGL Management has taken legal action against both Hargreaves Lansdown Asset Management and Link Fund Solutions, the fund’s authorised corporate director, as it was first reported by This Is Money and The Times.

The claims will centre around losses sustained directly as a result of the collapse of WEIF and also for “loss of opportunity” losses, suffered through missing out on alternative investments that, in contrast to WEIF, would have generated positive returns. Continue reading “Article: Hargreaves Lansdown faces legal action over Woodford fund”

Article: NatWest money laundering case linked to second criminal trial, prosecutors say

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NatWest money laundering case linked to second criminal trial, prosecutors say

Iain Withers, 19 March 2021

LONDON (Reuters) – Criminal money laundering charges against British state-backed bank NatWest are linked to a separate case against 13 individuals based in cities across the country, prosecutors have told Reuters.

Britain’s financial regulator, the Financial Conduct Authority (FCA), started a criminal action against NatWest on Tuesday, making it the first bank to be charged under a 2007 money laundering law.

The FCA accused NatWest of failing to monitor suspect activity by a client that deposited about 365 million pounds($500 million) in its accounts over five years, of which 264 million was in cash.

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Article: Losing LIBOR in the Capital Markets — A Reprieve?

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Losing LIBOR in the Capital Markets — A Reprieve?

Dawn Holicky Pruitt, 10 March 2021

As reported in our previous alert “Losing LIBOR in the Capital Markets — Are You Ready?,” the anticipated date for discontinuation of the London Interbank Offered Rate (LIBOR) is approaching. While LIBOR is a widely used benchmark rate for U.S. dollar-denominated floating-rate debt securities and other financial products, LIBOR was the subject of widespread market manipulation and ineffective regulation. In 2017, the Chief Executive of the United Kingdom Financial Conduct Authority (FCA) announced its intention to stop persuading or compelling banks to submit rates for the calculation of LIBOR to its administrator after 2021. This announcement strengthened the objective of the Alternative Reference Rates Committee (ARRC), a committee convened by U.S. regulators to identify LIBOR alternatives in the U.S. market.

While market participants were warned that LIBOR may cease to exist after 2021, the ICE Benchmark Administration Limited (IBA), as the administrator of LIBOR, recently announced the results of a November 2020 consultation regarding the upcoming discontinuation. Although certain lesser-utilized U.S. dollar-denominated LIBOR tenors will cease to be published after December 31, 2021, the IBA announced it will continue publishing widely used tenors (such as one-month LIBOR and three-month LIBOR) until June 30, 2023. The FCA’s support for the extension provides confidence regarding the ongoing representativeness of the continuing U.S. dollar-denominated LIBOR tenors until June 30, 2023.

The extension of widely used U.S. dollar-denominated LIBOR tenors provides issuers of LIBOR-linked debt securities with additional time to prepare for LIBOR discontinuance. In particular, the extension may, in many cases, allow for a natural end to LIBOR-linked debt securities through maturation or the exercise by issuers of redemption rights.

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Article: FCA Fines Ex-Stifel Nicolaus Trader For Misleading Market

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FCA Fines Ex-Stifel Nicolaus Trader For Misleading Market

Najiyya Budaly, 04 March 2021

The Financial Conduct Authority said Thursday it has fined a former Stifel Nicolaus trader and banned him from regulated activities for executing 129 so-called wash trades that misled the market about demand for his client’s shares.

The City watchdog said it has fined Adrian Geoffrey Horn £52,500 ($73,302) for market abuse and banned him indefinitely from performing any function related to a regulated activity. Horn was a former market making trader at Stifel Nicolaus Europe Ltd., which meant that he both bought and sold securities. Continue reading “Article: FCA Fines Ex-Stifel Nicolaus Trader For Misleading Market”

Article: Watchdog bans City of London trader for ‘wash trading’

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Watchdog bans City of London trader for ‘wash trading’

Hannah Godfrey, 04 March 2021

The city watchdog has banned ex-City of London trader Adrian Geoffrey Horn after he engaged in ‘wash trading’, a form of market abuse.

Horn, who worked as a market making trader at Cheapside-based Stifel Nicolaus Europe, was fined £52,000 by the Financial Conduct Authority (FCA) and banned for carrying out any regulated work in the future. Continue reading “Article: Watchdog bans City of London trader for ‘wash trading’”

Article: FCA Fines Ex-Stifel Nicolaus Trader For Misleading Market

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FCA Fines Ex-Stifel Nicolaus Trader For Misleading Market

Najiyya Budaly, 04 March 2021

The Financial Conduct Authority said Thursday it has fined a former Stifel Nicolaus trader and banned him from regulated activities for executing 129 so-called wash trades that misled the market about demand for his client’s shares.

The City watchdog said it has fined Adrian Geoffrey Horn £52,500 ($73,302) for market abuse and banned him indefinitely from performing any function related to a regulated activity. Horn was a former market making trader at Stifel Nicolaus Europe Ltd., which meant that he both bought and sold securities. Continue reading “Article: FCA Fines Ex-Stifel Nicolaus Trader For Misleading Market”

Article: Trading hot stocks like GameStop seems fun until you look beneath the surface

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Trading hot stocks like GameStop seems fun until you look beneath the surface

Congress is asking questions about whether middlemen or “market makers” like Citadel that execute stock trades really give small investors the best prices.

Gretchen Morgenson, ABCNews, 18 February 2021

Market makers like Citadel make money by pocketing the difference between the price at which they buy shares — the bid — and the price they receive from selling them to Robinhood clients, the offer. Other firms in the business are Virtu Americas, G1X Execution Services and Two Sigma Securities.

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