FCA Slaps Record Fine of nearly $20 Million on Merrill Lynch International
- Merrill Lynch International has incurred a substantial fine of $20 million for regulatory reporting infractions by the FCA.
Bank of America’s Merrill Lynch International (MLI) arm is the latest firm to suffer a brush with the UK’s Financial Conduct Authority (FCA) Financial Conduct Authority (FCA) The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol Read this Term), incurring a fine of $19,885,000 (£13,285,900) for trade reporting shortcomings, according to an FCA report.
MLI was found to have incorrectly reported 35,034,810 transactions, whilst failing to report another 121,387 transactions between the seven-year period from November 2007 and November 2014.
The fine itself, the largest transaction reporting-related infraction to date, underscores the gravity of the misconduct by MLI, given a pattern failure over a seven-year stretch. The latest development follows after a private warning back in 2002 against MLI, which subsequently carried a $224,000 (£150,000) fine back in 2006.
As a corollary, the FCA has implemented a penalty of $2.25 (£1.50) per line of incorrect or non-reported data for the first time, forgoing the customary $1.49 (£1.00) per line used in the three most recent transaction reporting cases. Such a measure by the FCA demonstrates the lack of effectiveness elicited in previous countermeasures, which ultimately promoted a record fine against MLI.
Despite the large price tag being carried already for its infractions, MLI actually evaded an even larger sum, given its Settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term at an early stage of the investigation, which prompted a 30% reduction in their overall fine – without this discount the fine would have been $28,407,162 (£18,979,876.)
According to Georgina Philippou, FCA acting director of enforcement and market oversight, in a recent statement, "Proper transaction reporting really matters. Merrill Lynch International has failed to get this right again – despite a Private Warning, a previous fine, and extensive FCA guidance and enforcement action in this area. The size of the fine sends a clear message that we expect to be heard and understood across the industry.
"Accurate and timely reporting of transactions is crucial for us to perform effective surveillance for insider trading and market manipulation in support of our objective to ensure that markets work well and with integrity," Philippou added.
Bank of America’s Merrill Lynch International (MLI) arm is the latest firm to suffer a brush with the UK’s Financial Conduct Authority (FCA) Financial Conduct Authority (FCA) The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol Read this Term), incurring a fine of $19,885,000 (£13,285,900) for trade reporting shortcomings, according to an FCA report.
MLI was found to have incorrectly reported 35,034,810 transactions, whilst failing to report another 121,387 transactions between the seven-year period from November 2007 and November 2014.
The fine itself, the largest transaction reporting-related infraction to date, underscores the gravity of the misconduct by MLI, given a pattern failure over a seven-year stretch. The latest development follows after a private warning back in 2002 against MLI, which subsequently carried a $224,000 (£150,000) fine back in 2006.
As a corollary, the FCA has implemented a penalty of $2.25 (£1.50) per line of incorrect or non-reported data for the first time, forgoing the customary $1.49 (£1.00) per line used in the three most recent transaction reporting cases. Such a measure by the FCA demonstrates the lack of effectiveness elicited in previous countermeasures, which ultimately promoted a record fine against MLI.
Despite the large price tag being carried already for its infractions, MLI actually evaded an even larger sum, given its Settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term at an early stage of the investigation, which prompted a 30% reduction in their overall fine – without this discount the fine would have been $28,407,162 (£18,979,876.)
According to Georgina Philippou, FCA acting director of enforcement and market oversight, in a recent statement, "Proper transaction reporting really matters. Merrill Lynch International has failed to get this right again – despite a Private Warning, a previous fine, and extensive FCA guidance and enforcement action in this area. The size of the fine sends a clear message that we expect to be heard and understood across the industry.
"Accurate and timely reporting of transactions is crucial for us to perform effective surveillance for insider trading and market manipulation in support of our objective to ensure that markets work well and with integrity," Philippou added.