Research by Kinetic Partners revealed that the FCA handed out nine fines for the offence throughout the period, totalling £346.4m, second only to the unfair treatment of customers, of which there were 10 cases.
However, despite there being fewer instances of market abuse, the offence held the greatest share of the sum total of fines of any category of violation, with customer maltreatment accounting for just £48.2m in fines.
Global head of consulting at Kinetic Partners, Monique Melis, said the financial services industry has grown increasingly aware of the impacts of market abuse on “institutions and consumers alike”.
“As such, the FCA’s focus has been centred on the detection and prosecution of market abuse including insider dealing, trading and market manipulation,” she added. “The large fines imposed for market abuse and their potential impact on a firm’s reputation is a valuable tool for deterrence and a high priority on the regulator’s agenda.”
She said that the “key lesson” from the research is that firms must have robust central monitoring functions and compliance systems in place to ensure “integrity”.
“It is of paramount importance that firms are vigilant about their internal monitoring and control mechanisms in order to maintain market confidence and ensure that any trading activities in which they engage are proper and clean.”
Sensitive information
In July, the FCA fined Ian Hannam, the ex-chairman of JP Morgan, £450,000 for two instances of market abuse.
Hannam was found to have disclosed “inside information” in a manner “other than in the proper course of his employment” during his time at the company.
In two emails sent between September and October 2008, he revealed sensitive market information about Heritage Oil, for whom he was lead adviser.
