According to research by regulatory compliance consultancy Kinetic Partners, the UK’s Financial Conduct Authority (FCA) issued fines of more than £346.3 million for market abuse related breaches in 2013.
The research also found that market abuse was the second most cited offense among fines filed against either firms or individuals, numbering nine for the year.
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In total, the regulatory body only handed down fines totaling £48.16 million for breaches related to unfair treatment of customers.
Many of these fines relate to the LIBOR scandal, which has seen banks including Barclays, RBS and Lloyds pay substantial penalties.
The biggest fine issued by the FCA in 2013 was the £136.7 million penalty against JP Morgan in September 2013 over the US$6.2 billion trading losses incurred by the ‘London Whale’ back in 2012.
Monique Melis, global head of consulting at Kinetic Partners, said: "There has been a growing awareness of how significantly market abuse impacts institutions and consumers alike. As such, the FCA’s focus has been centred on the detection and prosecution of market abuse including insider dealing, trading and market manipulation. The large fines imposed for market abuse and their potential impact on a firm’s reputation is a valuable tool for deterrence and a high priority on the regulator’s agenda.
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By GlobalData"The key lesson from the FCA’s focus on market abuse is that firms must have robust central monitoring functions and compliance systems in place to ensure that both the firm and its employees are operating with integrity. It is of paramount importance that firms are vigilant about their internal monitoring and control mechanisms in order to maintain market confidence and ensure that any trading activities in which they engage are proper and clean."
