Forex broker FXCM UK slapped with £4m FCA fine
The Financial Conduct Authority (FCA) has fined Forex Capital Markets and FXCM Securities (FXCM UK) £4m for allowing the US-based FXCM group to withhold profits of around £6m, which should have gone to UK clients.
FXCM UK also failed to tell the regulator that US authorities were probing another part of the group for the same misconduct.
The FCA says UK clients will be fully compensated, with credit being paid automatically into their accounts.
Director of markets at the FCA, David Lawton, said:
When consumers lose out because of poor conduct it undermines confidence in the integrity of our markets. The FCA will use all the tools at its disposal – supervision, rule-making and enforcement – to ensure that firms do not exploit conflicts of interest or the trust placed in them by their clients.
Tracey McDermott, the FCA’s director of enforcement and financial crime, said:
Not only did FXCM UK fail to treat its customers fairly or correctly apply our rules, I am particularly disappointed that it was not transparent in its dealings with the FCA. We expect all firms to put customers at the heart of their business, and we have taken action to ensure clients of FXCM UK will get redress.
In a statement released this morning by FXCM UK, chief executive officer Brendan Callan said the settlement is a "significant step" for the firm, when it comes to putting the issue behind them.
We believe it is imperative that all firms operating in the retail FX and CFD market uphold the same high standards and execution policies which we fully implemented back in 2010.
The group added that a recent analysis of trades over a six month period showed "how [its] customers have benefitted from [its] enhanced trading execution policy."