The Financial Services Authority has published a decision notice for Swift Trade Inc. indicating that it has decided to fine Swift Trade £8m for market abuse.
Swift have referred the matter to the tribunal where it and the FSA will present their case. The tribunal will then determine the appropriate action for the FSA to take. The tribunal make the decision whether to uphold cancel or vary the FSA decision.
The decision notice was May 6th 2011 and the FSA set out that decision to fine Swift Trade, a non FSA Canadian company with global operations, deliberately engaging in a form of manipulative trading known as layering.
It has not been possible to measure Swift trades profits however it is in excess of £1.75m.
The FSA state that this was a serious case of market abuse.
It was widespread and repeated on numerous occasions involving tens of thousands of trading orders by many individual traders sometimes in acting in concert with each other across many locations worldwide.
The trading led to a false or misleading impression of supply and demand and an artificial share price in the shares they traded which was to the detriment of the other market participants. This could undermine market confidence.
The FSA remains committed to tackling abuse of the UK markets-wherever it originates. Interference with the price formation process threatens the integrity of those markets.
“Market participants who offer direct market access should be aware of the risks that such access may be abused and take proactive steps to prevent it”.
The FSA have liaised with other regulators worldwide and with the LSE in bringing this action and acknowledges their assistance.
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