Citigroup Global Markets has been slapped with a £12.5m fine by the UK financial regulator for failing to monitor suspicious trading.
Until January 2018, the London-based international broker dealer arm of US bank Citigroup failed to identify significant gaps in its arrangements, systems, and procedures for trade surveillance, the Financial Conduct Authority said in a statement.
The FCA said it “significant trade surveillance gaps” in areas like equities, interest rates and commodities trades. Banks are required to implement rules introduced in 2016 and known as the market abuse regulation (MAR) to monitor for potential insider trading and market manipulation.
Once Citi’s failings were spotted, it “took 18 months to identify and assess the specific market abuse risks its business may have been exposed to,” the FCA said in a statement.
“By not fully implementing the new provisions when required, Citigroup Global Markets did not carry its full weight in this partnership, impacting market integrity and the overall detection of market abuse,” said FCA for enforcement director Mark Steward.
During the period covered by the FCA’s enforcement action, the broker-dealer earned about £2.6bn in revenue from arranging or executing trades on markets.
In return for co-operating with the FCA and agreeing to resolve the case, the fine was cut by 30% from an original punishment of £18m.
Citi was fined $400m by US regulators in October 2020 over “longstanding . . . [and] significant ongoing deficiencies” in its risk and control systems.
Reporting by Frank Prenesti at Sharecast.com
