The Financial Services Authority (FSA) is preparing to land a trading platform with an £8 million fine for market abuse.
The Canadian platform, formerly known as Swift Trade, has failed in its bid to block the FSA from publishing a penalty notice against the firm after unsuccessfully appealing in the Upper Tribunal.
The decision notice will allege Swift Trade systematically and deliberately engaged in manipulative trading activity known as layering, it was disclosed in the Tribunal hearing. New Model Adviser® understands the fine will amount to £8 million.
The London Stock Exchange issued a warning in 2007 over layering or spoofing, which involves traders placing a series of small orders to drive up the price of shares, then cancelling the orders.
Swift Trade went into liquidation on December 2010 but now operates as 7722656 Canada Inc. Peter Beck, president of the firm, launched the appeal, arguing publication of the decision notice would be unfair and would impact on the conclusion of the Ontario Securities Commission’s investigation into Swift Trade.
He also claimed the FSA would breach Beck’s right to private and family life under the Human Right Act, according to his barrister Philip Engelman.
Upper Tribunal judge Stephen Oliver QC rejected Beck’s claims, arguing the potential loss suffered by publication had not been specified. Beck has also applied for a judicial review of the FSA’s decision to publish its findings. The FSA said of the judicial review action: 'It is not that surprising that a challenge to our use of a new power comes soon after we start to use it. Indeed that is when you would expect a challenge.'