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Trading platform loses battle against £8m FSA fine
by Daniel Grote on Jan 28, 2013 at 07:10
Defunct Canadian trading platform Swift Trade has lost its fight against an £8 million fine from the Financial Services Authority (FSA) over manipulative trading.
The FSA in August 2011 announced plans to fine Swift Trade for ‘systematically and deliberately’ trading to cause small price movements on a large number of shares on the London Stock Exchange, estimating the platform made profits of more than £1.75 million from the abuse.
Swift Trade, which went into liquidation in December 2010 but now operates as 7722656 Canada Inc, appealed the fine at the Upper Tribunal.
It argued that the FSA did not have jurisdiction over it and that the trades were in synthetic products rather than shares, so not falling under the market abuse rules the FSA had applied. It claimed the trades were not manipulative but made as part of legitimate high-volume day trading, adding that while the Swift Trade platform was used, individual dealers independent of Swift were initiating trades, and they were undertaken by providers Merrill Lynch and Penson.
Tribunal judge Colin Bishopp rejected all of Swift’s arguments, and endorsed the FSA’s £8 million penalty. ‘There is little precedent about the level of penalty appropriate to conduct of this kind,’ he said. ‘Left to ourselves, we might well have concluded that £8 million was insufficient, but it is a substantial sum…we are not, however, persuaded there is any basis on which a lesser penalty could properly be imposed.’
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by Michelle Abrego on Mar 10, 2014 at 14:22