UNB, London :
Britain’s Financial Conduct Authority (FCA) announced Friday that it has fined inter-dealer broker Tullett Prebon (Europe) Limited 15.4 million pounds (about 19.34 million U.S. dollars) over the firm’s failed management.
Tullett Prebon’s Rates Division had “ineffective controls around broker conduct” between 2008 and 2010, according to a statement issued by the watchdog.
“Lavish entertainment and a lack of effective controls allowed improper trading to take place, including ‘wash’ trades (a ‘wash’ trade involves no change in beneficial ownership and has no legitimate underlying commercial purpose) which generated unwarranted and unusually high amounts of brokerage for the firm,” said the FCA.
The regulator stated that the firm’s senior management “wrongly believed sufficient systems and controls were in place,” while systems and controls “were not used or directed effectively.”
The serious failings would “undermine the proper function of wholesale markets,” the FCA noted.
Mark Steward, executive director of Enforcement and Market Oversight at the FCA, said “The market performs important public functions and is not a private game of self-enrichment.”
“While these trades did not mislead the market, nor amount to market abuse, the wash trades were entirely improper, undermining the proper function of the market,” Steward said.
“Senior management and compliance were cocooned from seeing the misconduct, and systems and controls failed to probe broker conduct, even when warning signs were visible,” Steward added.
According to the FCA, Tullett Prebon also breached Principle 11 of the FCA’s Principles for Businesses by “failing to be open and cooperative with the FCA” between August 2011 and October 2014.
Tullett Prebon is one of the world’s leading inter-dealer brokers, mainly operating as an intermediary in the financial, energy and commodities markets, with offices in 24 countries and regions worldwide.
Britain’s Financial Conduct Authority (FCA) announced Friday that it has fined inter-dealer broker Tullett Prebon (Europe) Limited 15.4 million pounds (about 19.34 million U.S. dollars) over the firm’s failed management.
Tullett Prebon’s Rates Division had “ineffective controls around broker conduct” between 2008 and 2010, according to a statement issued by the watchdog.
“Lavish entertainment and a lack of effective controls allowed improper trading to take place, including ‘wash’ trades (a ‘wash’ trade involves no change in beneficial ownership and has no legitimate underlying commercial purpose) which generated unwarranted and unusually high amounts of brokerage for the firm,” said the FCA.
The regulator stated that the firm’s senior management “wrongly believed sufficient systems and controls were in place,” while systems and controls “were not used or directed effectively.”
The serious failings would “undermine the proper function of wholesale markets,” the FCA noted.
Mark Steward, executive director of Enforcement and Market Oversight at the FCA, said “The market performs important public functions and is not a private game of self-enrichment.”
“While these trades did not mislead the market, nor amount to market abuse, the wash trades were entirely improper, undermining the proper function of the market,” Steward said.
“Senior management and compliance were cocooned from seeing the misconduct, and systems and controls failed to probe broker conduct, even when warning signs were visible,” Steward added.
According to the FCA, Tullett Prebon also breached Principle 11 of the FCA’s Principles for Businesses by “failing to be open and cooperative with the FCA” between August 2011 and October 2014.
Tullett Prebon is one of the world’s leading inter-dealer brokers, mainly operating as an intermediary in the financial, energy and commodities markets, with offices in 24 countries and regions worldwide.
