Citigroup Global Markets has been hit with a £12.6m fine by the UK’s financial watchdog for failing to monitor trading activities for potential cases of market abuse.
The Market Abuse Regulation, introduced in 2016, means businesses must fulfil surveillance requirements on trades and orders to catch types of insider trading and market manipulation.
Following an investigation, the Financial Conduct Authority (FCA) found that Citigroup’s broker-dealer took 18 months to assess the specific market abuse risks it may be exposed to and needed to look out for.
“Citigroup Global Markets’ flawed implementation resulted in significant gaps in its arrangements, systems, and procedures for additional trade surveillance,” the FCA said in a statement today.
Citigroup Global Markets agreed to resolve the case which meant the business was able to knock a third off the fine, which had initially been £17.9m.
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “The framework for market integrity depends on the partnership between the FCA and market participants using data to detect suspicious trading.
“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.”
A Citigroup spokesperson said: “Citi is pleased to put this matter behind us.”