FCA slaps GBP 1 mln fine on Interactive Brokers UK

[mlawson71]

UK’s financial services regulator, the Financial Conduct Authority (FCA), has fined the UK branch of the US brokerage Interactive Brokers (IBUK) GBP 1,049,412, the watchdog said.
The reason for the punishment are failings in IBUK’s post-trade systems and controls for identifying and reporting suspicious transactions in the period February 2014 to February 2015.

 

[tomorton]

Interesting reversal of pre-conceptions about brokers - it was the traders who were pulling the scams this time.

 

[mlawson71]

Interesting reversal of pre-conceptions about brokers - it was the traders who were pulling the scams this time.

True. There are scammers in all walks of life.

 

[tommcginnis]

It all sounds so familiar, though:

"However, the FCA found that IBUK has failed to adequately calibrate and test the post-trade monitoring systems to ensure potential market fraud by clients would be captured. Besides, IBUK did not provide oversight and quality control of the activities of the US team, did not monitor their reports and did not provide adequate training for the employees conducting the post-trade monitoring."

Sheeeesh. They could've taken any of that from reading ET.

 

[tomorton]

It all sounds so familiar, though:

"However, the FCA found that IBUK has failed to adequately calibrate and test the post-trade monitoring systems to ensure potential market fraud by clients would be captured. Besides, IBUK did not provide oversight and quality control of the activities of the US team, did not monitor their reports and did not provide adequate training for the employees conducting the post-trade monitoring."

Sheeeesh. They could've taken any of that from reading ET.

No, what the firm did was to cut corners on a regulatory requirement and try to save costs. Same as any industry, any firm, in any country. Normal business practice. Whereas most traders seem to regard brokers as akin to Al Capone.

 

[tommcginnis]

No, what the firm did was to cut corners on a regulatory requirement and try to save costs. Same as any industry, any firm, in any country. Normal business practice. Whereas most traders seem to regard brokers as akin to Al Capone.

That's not what I said or implied at all, TM.

 

[Sig]

No, what the firm did was to cut corners on a regulatory requirement and try to save costs. Same as any industry, any firm, in any country. Normal business practice. Whereas most traders seem to regard brokers as akin to Al Capone.

I run a company and can honestly say we've never tried to cut corners on regulatory requirements to try to save costs, and I'd consider it counterproductive to do so given the value of my reputation with clients is worth far more than a few pennies I could save trying to cut corners. You have a sadly a cynical view that I'm sure you've gained by experience, but there are dozens of companies I know of that don't subscribe to it, if that makes it any better.

 

[tomorton]

I run a company and can honestly say we've never tried to cut corners on regulatory requirements to try to save costs, and I'd consider it counterproductive to do so given the value of my reputation with clients is worth far more than a few pennies I could save trying to cut corners. You have a sadly a cynical view that I'm sure you've gained by experience, but there are dozens of companies I know of that don't subscribe to it, if that makes it any better.

Well, respect to you Sig. I have encountered a minority of companies and company owners that wanted to actually exceed UK legal requirements and I have only respect for them. But, sadly, my experience has been that most see regulation as a barrier to be worked around. If its any consolation, I don't see them as evil, just human.

 

[mlawson71]

I agree. I have no doubt that there are many legitimate companies that follow regulation and work with regulators, but there are also, unfortunately, plenty of bucketshops looking for shortcuts and quick profits. If that weren't the case they wouldn't be registering themselves in random places with little to no oversight.

Take the FCA's latest warning, for example - it was issued against a company called XMarkets, which is not licensed to work in the UK.
The interesting thing about them is where they are actually registered, which is the Republic of Samoa. That's not even a known offshore zone, it's just an island nation with a local financial sector is fairly unregulated, which makes it an attractive location for some financial services providers - the kind one may not necessarily trust.