FCA Publishes Decision Notices Against Bond Traders
Summary
The FCA has published Decision Notices for market abuse that have been issued to bond traders Diego Urra, Jorge Lopez Gonzalez and Poojan Sheth.
Urra, Lopez Gonzalez and Sheth have been banned from performing any functions in relation to regulated activity. The FCA has also imposed fines of £395,000 on Urra and £100,000 each on Lopez Gonzalez and Sheth.
The three traders, who were working at the time for Mizuho International Plc, have referred the Decision Notices to the Upper Tribunal, a body that deals with challenges to FCA regulated notices. The three bond traders and the FCA will each have the opportunity to present their cases. The Tribunal will then determine what, if any, action would be appropriate for the FCA to take.
The FCA’s proposed action outlined in the Decision Notices will have until the Tribunal has concluded its determination of the case. Its decision will be published on its website.
The FCA argues that, between 1 June 2016 and 29 July 2016, the traders placed large misleading orders for BTP Futures which they did not intend to execute, giving false and misleading signals and a false or misleading impression as to the supply or demand of Italian Government Bond futures (BTP Futures).
At the same time, they placed small orders which they did intend to execute on the opposite side of the order book. The FCA considers that the individuals repeated this pattern of deliberate and intentional market manipulation on a number of occasions and were dishonest.
The FCA took the view that the fines and the bans it has decided to impose reflect the serious nature of the FCA regulated breaches set out in the Decision Notices and would act as a deterrent to other market participants. It said there are no other ongoing investigations or actions relating to the trading.