The Financial Conduct Authority (FCA ), Great Britain's regulatory market watchdog, has banned three ex-Mizuho International Plc employees for market abuse. Diego Urra, Jorge Lopez Gonzalez and Poojan Sheth, associated with bond market trading, were prohibited from regulated activities on local financial markets.
According to the FCA's statement published on Wednesday, the accused traders placed large misleading orders for Italian Government Bond futures (BTP Futures) that they did not want to execute. It produced false signals and created misleading impressions regarding the demand and supply of the traded product.
The actions were taken between 1 June 2016 and 29 July 2016. In the meantime, Urra, Gonzalez and Sheth placed real but definitely smaller orders to execute on the opposite side of the market.
"The FCA considers that the individuals repeated this pattern of deliberate and intentional market manipulation on a number of occasions and were dishonest. In the FCA's view, the fines and the bans that it has decided to impose reflect the serious nature of the breaches set out in the Decision Notices and should act as a deterrent to other market participants," the regulator commented.
The FCA imposed a fine of £395,000 on Urra and £100,000 each on Sheth and Lopez. The defendants disagree with the decision and will pursue their case before the Upper Tribunal. It will ultimately decide whether the FCA took the correct action. The Tribunal can withdraw the regulator's orders, uphold them or change the size of the penalty.
FCA Fights with Rogue Financial Ads and Poor Practices
The FCA highlights its continued concerns regarding 'poor practices' that investment service providers are facing. In a 'Dear CEO' letter sent last week to retail contracts for difference (CFDs) brokers licensed in the Island, the market watchdog reminded that CFDs are highly speculative and risky products. Brokers who do not comply with the rules of their promotion and distribution increase consumers' risks.
Additionally, Great Britain's regulatory body has heralded new measures for firms approving financial promotions on Tuesday. They aim to identify and exclude rogue ads and campaigns.
Current actions are a part of a broader Consumer Investment Strategy recently presented by the FCA.
