Swift hit with £8m penalty for layering

THE FINANCIAL Services Authority has slapped Swift Trade with an £8m fine for market manipulation, a decision the now-dissolved Canadian firm is appealing.

Under new powers intended to crack down on market abuse, the FSA revealed in May that it planned to fine Swift before any appeals were complete. This is only the second time the FSA has used this power.

The watchdog said Swift used manipulative trading known as “layering”, which involves placing large orders on one side of the London Stock Exchange order book, to give the appearance of high demand.

The FSA said Swift then took advantage of such price shifts in a number of LSE-listed stocks before cancelling the original large orders.

It estimates that Swift made a profit in excess of £1.75m through the trades in 2007.
Swift Trade has lodged an appeal with the Upper Tribunal, which has powers to uphold, vary or cancel the FSA fine.

Peter Beck, chief executive of Swift in 2007, said earlier in the week that he expects the tribunal hearing to take place in spring 2012.

Judicial review proceedings are also ongoing.