Posts tagged 'FCA'

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Squeezing New World Oil & Gas, after a reminder from the LSE

A market notice from the London Stock Exchange on Thursday reminded member firms of their settlement obligations under its rules, prompted by what it describes as “settlement delays in relation to transactions in New World Oil & Gas.”

The tiny Aim listed oil exploration group, you may remember, is the possible subject of a failure to read the small print short squeeze. Details on the strange situation below, but two things to conclude from the LSE’s statement: regulators are keeping a close eye on this one, but aren’t likely to step in and stop any squeeze. Read more

A regulatory spoof

If American regulators get their way, Navinder Singh Sarao will spend the rest of his life in prison for having done what generations of traders did before him: post bids and offers that he hoped wouldn’t get filled. Meanwhile, sell-siders who deliberately misled investors about the sorts of loans getting packaged into private-label MBS face little threat of jail, nor do the traders who manipulated Libor. This is not the way to restore investor confidence in the markets.

For the few of you who don’t already know what Sarao has been accused of, it helps to consider a question that DE Shaw supposedly used to ask interview candidates before it got posted to the internet: Read more

Executing Trader Sarao

Craig Pirrong, Streetwise prof and futures trading expert, delves into the case of the Hounslow Spoofer, and like us, smells a rat.

For one thing, notes Pirrong, the official complaint doesn’t offer much in the way of detail on the execution strategy. It’s all very well alleging that Sarao spoofed the market with bogus orders, but none of this explains how he actually made money from the strategy. Especially given that the numbers presented don’t seem to add up. Read more

BNY Mellon and an expensive case of spooky commingling action at a distance

The FCA on Wednesday slammed custodian Bank of New York Mellon with an unprecedented £126m fine for failing to comply with its Client Assets Sourcebook rules (the CASS rules) throughout the period of 2007-2013.

It’s not the biggest FCA fine ever, but it is the largest issued for a breach of this kind, and is levied against the world’s largest custody bank by assets. The previous largest fine for a CASS failing, for example, was £38m for Barclays.

The failings in hand relate to the systemic commingling (a.k.a pooling) of assets at the bank, that should really have been kept segregated. Read more

Hope, in reality…

Who’d have thought?

This £203,948 bar bill…

… would eventually led to this… Read more

FCA = British Transport Police

Remember Jonathan Burrows? The ex-Blackrock serial fare dodger?

Well, the FCA are on it:

The Financial Conduct Authority (FCA) has banned Jonathan Paul Burrows from performing any function in relation to any regulated activities for not being fit and proper.

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A clusterFCA

It’s a day of flagellation at the British financial regulator…

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So Tesco stock surges on confirmation of SFO probe…

We guess this is the regulatory version of those occasions where a self-regarding company chairman or chief executive announces their retirement, only to watch the company’s share price rise in relief.

From Tesco on Wednesday afternoon, following a report on KleinmanwireRead more

A price spike story

The FCA is in danger of attracting regular readers to its Market Watch newsletter. Here’s an extract from Edition No. 46, about this momentary spike in the price of HSBC back in January…

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FCA 1.1 — Ian Charles Hannam 1

We feel sympathy for the FCA. But then, the hole in which it finds itself is of its own digging.

Consider the fresh news. Having spent eight months mulling over the evidence presented in Ian Hannam’s Upper Tribunal appeal against the regulator’s earlier imposition of a £450,000 fine for supposedly passing on inside information, the Upper Tribunal has concurred that Hannam did indeed breach the UK rulebook.

But as is gradually being realised, the rulebook itself is unworkable. It involves pursuing upright citizens for synthetic crimes. Read more

Hannam v FCA: appeal rejected

Fresh from the Upper Tribunal. Click below for the judgment.

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“7. Friday 28 March… f) Whether a false or disorderly market was present during this period”

Do click for other Terms of Reference of the FCA independent directors’ inquiry into the FCA’s role in the implosion of life-insurance shares last month…

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A “forward looking regulator,” in reverse gear… (Updated)


Are we about to see Mr Martin Wheatley do the perp walk? Read more

Pointless FCA communications Nos.6 & 7

On Thursday…

The Financial Conduct Authority (FCA) has today issued two Warning Notice Statements. This is the sixth and seventh time the FCA have issued a Warning Notice Statement since it was given the power to do so by the Financial Services Act 2012. The Government’s principal rationale for giving the FCA this power was to promote early transparency of enforcement proceedings. Read more

Crowdfunding rules arrive: angry face, sad face

The UK Financial Conduct Authority has published its long awaited rules for crowdfunders and peer-to-peer lenders. You can read the full policy statement here, but lets cut straight to some frothy outrage from Barry James, founder of the Crowdfunding Center.

On a day like today one has to wonder whether our FCA is the worst regulator in the western world. The words that spring first to mind are inflexible, stubborn and unimaginative. Maybe it’s time for a change.

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Spivs wanted

Click to view:

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Is the FCA psychotic?

More disciplinary action from the FCA, this time against an innocent individual who was innocent in the wrong way. (You’ll have to pay attention here, because it’s a bit complicated and goes back six years.) Tuesday’s statement from the regulator:

The Upper Tribunal (Tax and Chancery Chamber) has directed the Financial Conduct Authority (FCA) to ban former derivatives trader David John Hobbs from performing any role in regulated financial services. Read more

The peer problem for peer-to-peer lenders [update]

A friend of FT Alphaville who works in the real world, far from finance, asked us what we think about putting money with peer-to-peer lenders.

We advised him to buy gold-bitcoins instead, but it made us want to take a look. It turns out we’re not alone. The chancellor is expected on Thursday to launch a consultation on blessing peer-to-peer lending with inclusion in the UK’s popular ISA scheme for tax free savings accounts.*

But where we think we might be alone, for now, is worrying about something that has afflicted lenders from time immemorial: run risk. Read more

To all potential naughty boys and girls

The Financial Conduct Authority has written to the banks, suggesting that they think long and hard before enforcing contractual terms agreed with their small business borrowers.

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Who let the regulatory clowns out? (Updated)

This post has been substantially revised in the wake of an internal discussion here at the FT…


Close readers will recall that just earlier this week we were pondering the case of one Richard Usher, formerly chief FX dealer for JP Morgan in London. His mangled remains were found under the proverbial publicity bus that is the official regulatory investigation into the supposed fixing of the daily WM/Reuters forex price fix, which is currently underway on both sides of the Atlantic. It seemed a shame to us that someone had been executed, professionally, for simply being in possession of an alleged Skype chat, therein containing some colourful banter. Especially when no evidence of said Skype chat had yet been presented.

It looked to us like someone, almost certainly in regulatory circles, was trading Usher’s name for political gain.

But now we’re confused. Read more

One Richard Usher, thrown under the regulator’s PR bus

He’s dead, of course, professionally. Former chief FX dealer for JP Morgan in London, Richard Usher. Bloomberg has the glee:

…wrote instant messages while he was at Royal Bank of Scotland Group Plc (RBS) that U.K. regulators are scrutinizing as part of their investigation of alleged currency manipulation, two people with knowledge of the matter said.

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A carbon comedy

Some scumbag correspondence from…

Good afternoon,

We hope this email finds you well. It has been brought to our attention that you have been approached by a number of sales companies in the past regarding the purchasing of carbon credits. For example, some of the particular companies in question are: Capital Asset Partnership, Worldwide Commodities, MH Carbon Limited as well as many others.

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How to make a Whale fine, with the FCA

Within the “sanction” section in the Final Notice on the JP Morgan Whale affair, the FCA takes eight full pages, containing 42 clauses, to get to this:

Conclusion Read more

BARC and the true price of “advice”

The Regulatory and other investigations or proceedings part of the Barclays rights prospectus, published on Monday, is worth reading in full. But first you need to look at this chart, because it provides some context for what happened at Barclays in October 2008. The price of BARC stock more or less halved that month.

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A peek into the swaps swamp

First up, consider this comic flow chart from the FCA. Click to enlarge.

Yes, of the 30,169 cases of potential mis-selling of interest rates hedges to gullible British businesses, a sum total of 10 cases have so far been settled. The bill to date is £500,000, but there’ll be a few zeros added to that figure before we’re through. Read more

Warning bondholders, Co-op edition

How’s this for a bank bondholder disclosure? Bear in mind — it’s over 20 years old.

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Who the hell is this man? (Hint: think CRD IV)

We’re completely thrown. Read more

Should Michael Coscia have been fined, or medicated?

Much hoopla on Monday from the FCA, Britain’s newly-fashioned regulator, as it meted out a $903,176 fine to Michael Coscia, a dirty HFT operator caught manipulating crude oil futures back during the autumn of 2011.

We learn that…

Between 6 September 2011 and 18 October 2011 Coscia used an algorithmic programme of his own design to instigate an abusive trading strategy known as “layering”. During this time, Coscia placed thousands of false orders for Brent Crude, Gas Oil and Western Texas Intermediate (WTI) futures from the US on the ICE Futures Europe exchange (ICE) in the UK.

Full details are available in the final notice, but you’ll want to click on the image below for an “animated example of Mr Coscia’s trading…” Read more


A new word to you? Yes, well, we were searching for a suitable adjective to describe this:

20 June 2013
Tullett Prebon plc

Statement in relation to court proceedings

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