Swift Trade Loses Appeal Over $12 Million U.K. Market-Abuse Fine
Defunct trading firm Swift Trade Inc. lost an appeal over an 8 million-pound ($12.6 million) fine for market abuse from the U.K. Financial Services Authority.
Swift Trade, which was dissolved in December 2010, was fined for “layering,” in which multiple buy orders for shares are submitted and withdrawn to manipulate the price of a security, the FSA said in an e-mailed statement. The practice led to a “misleading impression of supply and demand and an artificial share price,” the FSA said.
“This was a particularly cynical case where a business model was based on market abuse,” Tracey McDermott, director of enforcement at the FSA, said in an e-mailed statement.
The Ontario Securities Commission also found that Swift Trade breached securities laws by providing software and an electronic trading system for around 4,500 unregistered traders in 2008, according to a 2011 report. The firm failed to establish proper controls and supervision, adequately monitor its clients’ trading, or produce accurate trading records, the agency said.
The company had appealed the penalty at a London tribunal in June, saying that the fine was “entirely disproportionate” to its activities.
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