FCA fines brokers £4.8m for market abuse

BGC/GFI are inter-dealer brokers specialising in exchange listed and over-the-counter financial products and related derivatives.

The regulator said BGC/GFI failed to properly implement the Market Abuse Regulation trade surveillance requirements which meant there was an increased risk that potentially suspicious trading would go undetected.

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It said between July 2016 and January 2018 BGC/GFI had manual, automatic and communications surveillance processes that were deficient, and therefore, inadequate in properly addressing the risk of market abuse.

Additionally, BGC/GFI’s systems for monitoring market abuse did not have proper coverage of all asset classes which are subject to MAR, the FCA said.

Mark Steward, executive director of enforcement and market oversight, said: “This case is another example of the FCA’s determination to ensure firms prioritise market integrity and the maintenance of high standards of compliance.”

It is the second enforcement action the FCA has taken against market abuse this week. On Wednesday 7 December the regulator banned three bond traders, Diego Urra, Jorge Lopez Gonzalez and Poojan Sheth, for market abuse.

It also imposed fines of £395,000 on Mr Urra and £100,000 each on Mr Lopez Gonzalez and Mr Sheth, all who worked at Mizuho International Plc at the time. The three are appealing the judgment.

BGC/GFI agreed to resolve its case at an early stage and qualified for a 30% discount. Without the discount, the fine would have been £6,821,800. BGC/GFI has since enhanced its systems and controls.

BGC Brokers LP (BGC), GFI Brokers Limited and GFI Securities Limited (GFI) are separate legal entities. BGC is the UK subsidiary of BGC Inc. GFI was purchased by BGC Inc in January 2016. Although GFI is run separately, it is part of the wider BGC organisation and shares the same compliance department.

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