U.K. Financial Conduct Authority Fines Citigroup $15M For Trade Monitoring Failures

Money Laundering
Citigroup Global Markets has agreed to pay more than 12.5 million pounds ($15 million) in a settlement with the U.K. Financial Conduct Authority (FCA) resulting from a failure to properly detect market abuse activities.

Introduced in 2016, the Market Abuse Regulation (MAR) created requirements to monitor for insider dealing, unlawful disclosure of inside information, and market manipulation offenses. Article 16(2) of MAR requires firms that arrange or execute transactions in financial instruments “to establish and maintain effective arrangements, systems, and procedures to detect and report potential market abuse,” the FCA stated.

According to the FCA’s Aug. 19 final notice, between November 2015 and January 2018, Citigroup Global Markets failed to properly implement the MAR trade surveillance requirements when they took effect. Citigroup Global Markets “took 18 months to identify and assess the specific market abuse risks its business may have been exposed to and which it needed to detect,” the FCA stated. “Citigroup Global Markets’ flawed implementation resulted in significant gaps in its arrangements, systems, and procedures for additional trade surveillance.”

“The framework for market integrity depends on the partnership between the FCA and market participants using data to detect suspicious trading,” FCA Executive Director of Enforcement and Market Oversight Mark Steward stated in a press release. “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.”

The FCA said the fine included a 30 percent discount. Otherwise, the fine would have been £17.9 million ($21.2 million).  end slug


Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.

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