Enforcement Watch

Enforcement Watch

Issue 24
Adam Epstein

Editor's Note

The last 4 months have been unusually bumper months for enforcement outcomes, and we have chosen some of the most interesting cases to cover. As for possible future activity, which we highlight in On the Horizon, market abuse in all its guises and CFDs loom particularly large. We hope you enjoy this issue.

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Enforcement Case Highlights

17 October 2017: Rio Tinto Plc fined £27 million for DTR breaches - read more

18 October 2017: Merrill Lynch receives substantial fine for transaction reporting failures - read more

23 October 2017: Taking Financial Ombudsman Service decisions seriously: Foreman Financial Services - read more

6 November 2017: First Upper Tribunal Case on Third Party Rights Since Macris - read more

22 November 2017: Penalty for BAML "algo-baiter" - read more

5 December 2017:  Bluefin Insurance fined £4m for putting commercial interests ahead of customers' interests - read more

13 December 2017: Fine on AIM Company For Late Disclosure - read more

25 January 2018: FCA fine for failures around suspicious activity reporting highlights the risks in relying on group-wide controls in UK companies - read more

On the Horizon

Principals in the Spotlight over Relationships with Appointed Representatives and Introducer Appointed Representatives - read more

FCA pulls no punches in its quest for clean markets - read more

The FCA Consults on SMCR Transitional Arrangements - read more

Last Chance Saloon for spread-betting firms?  "Dear CEO" letter about retail contracts for differences (CFD) products - read more

FCA fine for failures around suspicious activity reporting highlights the risks in relying on group-wide controls in UK companies

FCA fine for failures around suspicious activity reporting highlights the risks in relying on group-wide controls in UK companies

Following a hearing in front of its Regulatory Decisions Committee (RDC), the FCA has issued a Final Notice to Interactive Brokers (UK) Limited (IBUK).

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Rio Tinto Plc fined £27 million for DTR breaches

Rio Tinto Plc fined £27 million for DTR breaches

In October last year, Rio Tinto Plc was fined £27,385,400 for breaches of the Disclosure and Transparency Rules (this figure represented a 30% early settlement discount).

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Merrill Lynch receives substantial fine for transaction reporting failures

Merrill Lynch receives substantial fine for transaction reporting failures

The FCA has imposed a fine of £34,524,000 on Merrill Lynch International (MLI) in the first enforcement action against a firm for failing to report details of trading in exchange traded derivatives under the European Markets Infrastructure Regulation (EMIR).

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Taking Financial Ombudsman Service decisions seriously: Foreman Financial Services

Taking Financial Ombudsman Service decisions seriously: Foreman Financial Services

The recent FCA Final Notice against Foreman Financial Services Ltd (FFSL) is a timely demonstration of why firms should take decisions of the Financial Ombudsman Service (FOS) seriously, even when they disagree with them.

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First Upper Tribunal Case on Third Party Rights Since Macris

First Upper Tribunal Case on Third Party Rights Since Macris

Earlier this year, the Supreme Court handed down its judgment in the case of Achilles Macris on what constituted "identification" of a third party for the purposes of the relevant Act. It was a narrowly drawn judgment, a judgment we described as "proving somewhat controversial in the enforcement community".

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Penalty for BAML "algo-baiter"

Penalty for BAML "algo-baiter"

Paul Axel Walter has been fined £60,090 by the FCA for committing market abuse in terms of s.118(5) of the Financial Services and Markets Act 2000 (FSMA).

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Bluefin Insurance fined £4m for putting commercial interests ahead of customers' interests

Bluefin Insurance fined £4m for putting commercial interests ahead of customers' interests

Bluefin Insurance Services Limited has been fined £4,023,800 by the FCA in relation to its systems and controls and communications with clients.

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Fine on AIM Company For Late Disclosure

AIM Company Fined For Late Disclosure

The FCA has fined Tejoori Limited the sum of £70,000, after discount of 30% for early settlement.

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Principals in the Spotlight over Relationships with Appointed Representatives and Introducer Appointed Representatives

Principals in the Spotlight over Relationships with Appointed Representatives and Introducer Appointed Representatives

In November last year, the FCA issued an alert to all Principals who have Appointed Representatives or Introducer Appointed Representatives (ARs).

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FCA pulls no punches in its quest for clean markets

FCA pulls no punches in its quest for clean markets

On 14 November 2017, Julia Hoggett (Director of Market Oversight at the FCA) delivered a speech about compliance with the market abuse regime.

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The FCA Consults on SMCR Transitional Arrangements

The FCA Consults on SMCR Transitional Arrangements

On 13 December 2017, the FCA published consultation papers (CP17/40-42) that set out proposed transitional arrangements for the wider roll-out of the Senior Management and Certification Regime (SMCR).

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Last Chance Saloon for spread-betting firms?  "Dear CEO" letter about retail contracts for differences (CFD) products.

Last Chance Saloon for spread-betting firms? "Dear CEO" letter about retail contracts for differences (CFD) products.

Retail CFDs are complex, leveraged derivative financial instruments that investment firms commonly offer to retail clients through online trading platforms.

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