FCA – Page 2 – Financial Treason & Crime

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’”

03/04/202104/15/2021

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

Article - Media, Publications

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”

02/18/202102/18/2021

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

Article - Media

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.

Read full article.

09/16/202003/18/2021

Article: FCA bans trader for market manipulation

Article - Media, Publications

FCA bans trader for market manipulation

Daniela Esnerova, 16 September 2020

The FCA has banned “experienced trader” and portfolio manager Corrado Abbattista from performing any functions in relation to regulated activity for market abuse.

The regulator has also imposed a fine of £100,000 on Abbattista, who is a partner and chief investment officer at Fenician Capital Management.

In its decision notice, the FCA said it considers that between 20 January and 15 May 2017, Abbattista repeatedly placed in the market large misleading orders for contract for differences, referenced to equities, which he did not intend to execute.

“At the same time, he placed smaller orders that he did intend to execute on the opposite side of the order book to the misleading orders,” the regulator wrote. Continue reading “Article: FCA bans trader for market manipulation”

09/16/202003/18/2021

Article: UK watchdog plans to fine London trader for market manipulation

Article - Media, Publications

UK watchdog plans to fine London trader for market manipulation

Reuters Staff, 16 September 2020

Britain’s Financial Conduct Authority (FCA) said on Wednesday it would impose a 100,000-pound fine on a London trader for market abuse and prohibit him from performing any functions related to regulated activity.

Corrado Abbattista, partner and chief investment officer at Fenician Capital Management LLP, repeatedly placed “large misleading” orders for Contract for Differences (CFDs), referenced to equities, between Jan. 20 and May 15, 2017, which he did not intend to execute, the FCA said bit.ly/32yIuuk.

At the same time, he placed smaller orders that he did intend to execute on the opposite side of the order book to the misleading orders, the financial regulator added. Continue reading “Article: UK watchdog plans to fine London trader for market manipulation”

05/15/202005/18/2020

Article: Burford Loses Bid For LSE Trader Info In Short-Selling Attack

Article - Media

Burford Loses Bid For LSE Trader Info In Short-Selling Attack

Richard Crump, Ed Harris

Law360, 15 May 2020

Burford Capital has failed to win a court order to force the London Stock Exchange to hand over the names of traders that dealt in its shares. (iStock)

Judge Andrew Baker has refused to grant an application by Burford Capital Ltd. for a court order to force the exchange to hand over the names of traders that bought and sold the funder’s shares on Aug. 6 and 7, 2019.

Read full article.

05/15/202005/18/2020

Article: Burford Capital loses fight to force London Stock Exchange to hand over confidential trading data

Article - Media

Burford Capital loses fight to force London Stock Exchange to hand over confidential trading data

Global Legal Post, 15 May 2020

Litigation funder Burford Capital has conceded defeat in an unprecedented battle with the London Stock Exchange (LSE) after the High Court rejected its application for the LSE to hand over confidential trading information.

Burford was seeking the identities of market participants trading in its shares in a bid to prove that its share price had been illegally manipulated during a sell-off that occurred after a heavily critical research report by hedge fund Muddy Waters last August.

Read full article.

04/27/202003/18/2021

Article: Market manipulation persists in London’s financial district

Article - Media, Publications

Market manipulation persists in London’s financial district

LLB EDITOR, 27 April 2020

A total of 822 reports of suspected market manipulation were made to the FCA last year (year end Dec 31 2019) by market participants, suggesting that the problem is far from being eradicated, says RPC, the City-headquartered law firm.

The number of reports of market manipulation saw a slight increase last year, rising from 812 in 2018.

Market manipulation is the attempt to artificially increase or decrease the price of an asset, index or its derivative in order to make a gain. Following the LIBOR scandal that broke in 2012, the laws relating to market manipulation were significantly tightened up. This included criminalising the attempted manipulation of benchmarks (Financial Services Act 2012). Continue reading “Article: Market manipulation persists in London’s financial district”

04/01/202004/30/2020

Web: Short Sales Bans in Response to the COVID-19 Pandemic

Web

Short Sales Bans in Response to the COVID-19 Pandemic

Barnabas Reynolds, Thomas Donegan, Russell Sacks

Shearman & Sterling, 1 April 2020

In the wake of the COVID-19 pandemic, numerous European jurisdictions, including France, Italy, Spain, Greece and Belgium have enacted short sale bans in an attempt to stabilize financial markets and maintain investor confidence. The following note provides an overview of these bans as well as an overview of the 2008 partial ban(s) on short selling by the U.S. in response to the financial crisis. To date, the United States has not yet indicated that it is considering a ban on short selling in response to market volatility due to the COVID-19 pandemic.

Continue reading “Web: Short Sales Bans in Response to the COVID-19 Pandemic”

03/30/202004/27/2020

Article: Regulators across Europe clash over bans on short selling

Article - Media

Regulators across Europe clash over bans on short selling

Philip Stafford, Laurence Fletcher, Robert Smith

Financial Times, 30 March 2020

France, Spain and Italy issued one-day prohibitions against betting on falling share prices for selected companies — and then longer bans of between one and three months, applied to all stocks listed on their domestic markets. Belgium, Austria and Greece swiftly followed suit, while Esma, the pan-European regulator, demanded tighter standards on reporting of short positions. Markus Ferber, an influential European MEP, urged a co-ordinated ban across the continent. But the clampdown has been partial.

Paywall Access to Article.

07/19/201703/30/2021

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

Article - Media, Publications

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

Michael Asaro and Richard Williams, 19 July 2017

New York Law Journal has published the article “‘Spoofing’: The SEC Calls It Manipulation, But Will Courts Agree?” written by Michael Asaro and Richard Williams Jr., partner and associate, respectively, in the litigation practice at Akin Gump.

Asaro and Williams analyze the act of spoofing, which they describe as “a relatively new form of alleged market manipulation,” under the open-market manipulation case law. They focus on a decision by the U.S. Court of Appeals for the 2nd Circuit in ATSI Communications v. Shaar Fund, which is seen as binding precedent. Continue reading “Article: FCA comes down on Wirex after allegations of turning a blind eye to money laundering”

11/12/201403/20/2021

Article: Regulators fine global banks $4.3 billion in currency investigation

Article - Media, Publications

Regulators fine global banks $4.3 billion in currency investigation

Kirstin Ridley, Joshua Franklin, Aruna Viswanatha, 12 November 2014

Regulators fined six major banks a total of $4.3 billion for failing to stop traders from trying to manipulate the foreign exchange market, following a yearlong global investigation.

HSBC Holdings Plc, Royal Bank of Scotland Group Plc, JPMorgan Chase & Co, Citigroup Inc, UBS AG and Bank of America Corp all faced penalties resulting from the inquiry, which has put the largely unregulated $5-trillion-a-day market on a tighter leash, accelerated the push to automate trading and ensnared the Bank of England.

Authorities accused dealers of sharing confidential information about client orders and coordinating trades to boost their own profits. The foreign exchange benchmark they allegedly manipulated is used by asset managers and corporate treasurers to value their holdings.

Dealers used code names to identify clients without naming them and swapped information in online chatrooms with pseudonyms such as “the players”, “the 3 musketeers” and “1 team, 1 dream.” Those who were not involved were belittled, and traders used obscene language to congratulate themselves on quick profits made from their scams, authorities said.

Wednesday’s fines bring total penalties for benchmark manipulation to more than $10 billion over two years. Britain’s Financial Conduct Authority levied the biggest penalty in the history of the City of London, $1.77 billion, against five of the lenders.

Read Full Article

07/22/201403/20/2021

Article: Criminal investigation into possible price rigging in London foreign exchange market

Article - Media, Publications

Criminal investigation into possible price rigging in London foreign exchange market

Merco Press, 22 July 2014

The United Kingdom Serious Fraud Office (SFO) has launched a criminal investigation into allegations of price rigging in the £3tn-a-day foreign exchange market. The probe will look into allegations of “fraudulent conduct”, the director of the SFO said in a statement.

Around 15 international agencies are investigating allegations of collusion and price manipulation. It is alleged that traders used online chat-rooms to plan the fixing of benchmark prices.

The Financial Conduct Authority (FCA) said in October it had joined other regulators around the world in scrutinizing firms over the potential manipulation of the foreign exchange market.

Several investment banks, including Barclays and HSBC have already suspended currency traders due to the investigation by the FCA. And in March this year the Bank of England suspended one member of staff over the probe.

At the time the head of the Financial Conduct Authority, Martin Wheatley, said that currency manipulation was “every bit as bad” as the Libor scandal, where banks including Barclays, Royal Bank of Scotland and UBS paid fines totaling 6bn dollars relating to Libor fixing.

For the criminal probe the SFO will work in co-operation with the FCA and the US Department of Justice, which announced its own criminal investigation last October.

Earlier this year US prosecutors flew to London to question individuals over allegations of market manipulation.

The Serious Fraud Office is an independent UK government department responsible for investigating and prosecuting serious and complex fraud, bribery and corruption. It is headed by the Director, David Green CB QC, who exercises powers under the superintendence of the Attorney General. These powers are derived from the Criminal Justice Act 1987.

Read Full Article

06/02/201403/20/2021

Article: Osborne to target foreign exchange manipulation in City clean-up

Article - Media, Publications

Osborne to target foreign exchange manipulation in City clean-up

Kamal Ahmed, 02 June 2014

The obscure and complicated foreign exchange market is to be the next target of Treasury action, I have been told.

The chancellor is working with Whitehall officials and the international Financial Stability Board (FSB) on new regulations which will be imposed on the market. At the moment, foreign exchange (known in City shorthand as “forex”) is largely unregulated and left to the bank traders who execute deals on behalf of global companies. Companies use forex deals to move money between different currencies and a large part of the market is dealt through London.

One senior official I have spoken to agreed that the public would be “very surprised” that such a major market was clearly open to abuse. The Treasury is likely to announce a set of measures to “clean up the market”, probably in the next fortnight.

The prices in forex are set by traders who are doing the deals. Traders are able to pick a selection of the trades they have been asked to execute, meaning they can choose those most advantageous to their bank. The prices are set at the 4pm “fix”, a daily City benchmark against which currencies are priced. I have written a short “How It Works” at the end of this blog on the allegation that forex is manipulated.

Regulators around the world including the Financial Conduct Authority (FCA) in London and the US Department of Justice are investigating allegations of forex manipulation. It has been reported that at least 15 banks are involved and nine are thought to have suspended or fired traders. No allegations have been proved and no admissions of fault made.

Martin Wheatley, the head of the FCA, said the allegations, if substantiated, could be “every bit as bad as Libor”, referring to the revelations three years ago that the market which governs how banks lend to each other was regularly fixed.

Read Full Article

10/12/201303/23/2021

Article: Former Royal Bank of Scotland trader linked to currency market fixing

Article - Media, Publications

Former Royal Bank of Scotland trader linked to currency market fixing

Jill Treanor, 12 OCtober 2013

Electronic messages that Royal Bank of Scotland handed to the City regulator in connection with potential manipulation of the £3tn-a day currency market are reported to have been sent by the bailed-out bank’s former trader Richard Usher.

The messages are said to be among those handed to the Financial Conduct Authority (FCA) by the bank, which is 81% owned by the taxpayer.

Usher, who could not be reached for comment, is now the head of spot trading at JP Morgan in London. He has been listed as a member of a Bank of England committee that polices a voluntary code of group practice for the markets.

The regulatory review by the FCA, which has not yet escalated its inquiries into a formal investigation, implies no wrongdoing by Usher, according to the Bloomberg news agency, which revealed his identity.

The analysis of the electronic messages is the latest move by regulators to test the integrity of benchmarks used to price financial products in the light of the Libor-rigging scandal as well as manipulation of gas prices. The investigation was triggered by reports in the Guardian last year.

The FCA said in June it was looking at foreign exchange markets after Bloomberg reported that traders at some banks were sharing information about their positions through instant messages. These were said to be a way to manipulate an index compiled by WM/Reuters and based on prices of currencies for a 60-second period.

Read Full Article