The Financial Conduct Authority has banned a former Stifel Nicolaus Europe market-making trader from regulated activity and fined him £52,500 for market abuse.
The City watchdog said Adrian Geoffrey Horn had engaged in market abuse by executing trades with himself — so-called ‘wash trading’.
Horn intentionally placed buy orders in shares in McKay Securities that traded with his existing sell-orders, the FCA said.
Horn executed 129 wash trades between 18 July 2018 and 22 May 2019.
“Horn entered orders into the market in such a way as to try and avoid anyone detecting that he was wash trading,” the FCA’s statement said.
He executed the trades to ensure a minimum number of shares were traded in Stifel client McKay each day, which he thought was a requirement to ensure McKay stayed in the FTSE All Share Index.
Horn thought by keeping McKay in the index he would benefit from the relationship between Stifel and its clients.
The FCA said Horn was aware his actions might constitute market manipulation, but “recklessly” went ahead with the trades anyway.
“Mr Horn’s manipulative trading was serious. Wash trading is a form of manipulation which undermines market efficiency and integrity,” Mark Steward, executive director of enforcement and market oversight at the FCA.
“Wash trading is a form of manipulation which undermines market efficiency and integrity”
Horn could not be reached for comment.
A spokesperson for Stifel Europe said: “Our internal systems flagged certain trades executed by Mr Horn which were of concern and we notified the FCA. The FCA conducted an investigation with which Stifel cooperated fully and no action has been taken against the firm. Mr Horn left Stifel in July, 2019.”
The FCA said Horn “demonstrated a high level of cooperation during the investigation,” including “significant admissions” in an early interview with the FCA.
Horn’s financial penalty was reduced by 25% as a result and he received a further 30% settlement discount.
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