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FCA fines broking firm for misleading conduct

The FCA has imposed a fine on broking firm TFS-ICAP for misleading customers in the FX derivatives market.

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Published 22 December 2020

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  • Financial services

The FCA has imposed a fine on broking firm TFS-ICAP for misleading customers in the FX derivatives market.

The regulator found that between 2008 and 2015, brokers at TFS-ICAP openly carried out a deceptive practice known as “printing” trades.

The purpose of “printing” is to drum up business by giving an incorrect impression of trading activity. Brokers would communicate to prospective clients that certain trades had been executed at specified prices and/or sizes, when in fact no such trades had taken place.

When asked about the aim of this practice, one broker commented to the FCA that it was about trying to “grease the wheels of motion”. He said that “if you have a tight price the people won’t do … the purpose would have been to … entice them into trades at that level”.

The FCA found that this practice was conducted openly at TFS-ICAP across multiple broking desks, to such an extent that brokers saw it as part of their ordinary roles.  It was done without regard for the interests of market participants or the wider financial system.

Although the regulator found no direct evidence that senior management figures were aware of printing within the business, it did consider TFS-ICAP’s governance structures to be inadequate, pointing to a lack of appropriate oversight over compliance and conduct risks.

The FCA fined TFS-ICAP approximately £3.4 million, after a 30% reduction for early settlement.

Attention will now turn to firm’s affected clients. “Printing” involves inducing people to enter into transactions which they otherwise might not have wanted. This could amount to actionable misrepresentation and any customers who suffered a resultant loss might therefore have legal recourse against the firm.

Our Banking disputes team regularly acts for individuals and business who have suffered from misrepresentations in a financial context. Please contact us if you require tailored advice.

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Shorter Reads

FCA fines broking firm for misleading conduct

The FCA has imposed a fine on broking firm TFS-ICAP for misleading customers in the FX derivatives market.

Published 22 December 2020

Associated sectors / services

  • Banking & financial disputes
  • Financial services

Authors

The FCA has imposed a fine on broking firm TFS-ICAP for misleading customers in the FX derivatives market.

The regulator found that between 2008 and 2015, brokers at TFS-ICAP openly carried out a deceptive practice known as “printing” trades.

The purpose of “printing” is to drum up business by giving an incorrect impression of trading activity. Brokers would communicate to prospective clients that certain trades had been executed at specified prices and/or sizes, when in fact no such trades had taken place.

When asked about the aim of this practice, one broker commented to the FCA that it was about trying to “grease the wheels of motion”. He said that “if you have a tight price the people won’t do … the purpose would have been to … entice them into trades at that level”.

The FCA found that this practice was conducted openly at TFS-ICAP across multiple broking desks, to such an extent that brokers saw it as part of their ordinary roles.  It was done without regard for the interests of market participants or the wider financial system.

Although the regulator found no direct evidence that senior management figures were aware of printing within the business, it did consider TFS-ICAP’s governance structures to be inadequate, pointing to a lack of appropriate oversight over compliance and conduct risks.

The FCA fined TFS-ICAP approximately £3.4 million, after a 30% reduction for early settlement.

Attention will now turn to firm’s affected clients. “Printing” involves inducing people to enter into transactions which they otherwise might not have wanted. This could amount to actionable misrepresentation and any customers who suffered a resultant loss might therefore have legal recourse against the firm.

Our Banking disputes team regularly acts for individuals and business who have suffered from misrepresentations in a financial context. Please contact us if you require tailored advice.

Associated sectors / services

  • Banking & financial disputes
  • Financial services

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