The New York district court slapped a $7 million fine on interdealer broker TFS-ICAP and its two entities in New York and in London for clients’ deception and market misconduct.
The US Commodity Futures Trading Commission (CFTC) charged TFS-ICAP LLC and TFS-ICAP Ltd. for representing bids and offers that had not been made to clients and for communicating to trades that had not occurred.
TFS-ICAP admited that its employees engaged in the misconduct, known as “flying” prices and “printing” trades.
The misconduct occurred between January 2014 and August 2015 when TFS-ICAP brokers represented to US-based bank clients. The broker told its clients that there were bids or offers for an FX option at a particular level when, in fact, no trading institution had bid or offered the option at that level. TFS-ICAP brokers on the Emerging Markets desks in both London and New York also communicated that trades had occurred when a trade had not, in fact, occurred.
The CFTC also found that TFS-ICAP, its former CEO Ian Dibb and its former Emerging Markets desks head Jeremy Woolfenden failed to supervise the broker conduct. The enforcement action resolves that the defendants Dibb and Woolfenden are each to pay a fine of $500,000 for their individual supervisory failures. They have both agreed to not apply for registration or claim exemptions from registration with the CFTC, or engage in any activity requiring such registration or exemption from registration with the CFTC, for five years.
CFTC Acting Director of Enforcement Vince McGonagle commented:
Brokers and other intermediaries play a critical role in our markets. The CFTC will act to ensure that these entities communicate and report honest and accurate pricing information to protect the integrity of the markets. We are also committed to holding corporate managers who have regulatory supervisory responsibilities accountable to ensure policies and procedures are in place that would have prohibited, and could have deterred, unlawful conduct from occurring.
The UK Financial Conduct Authority also announced sanctions against TFS-ICAP Ltd in November 2020.
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