FCA restricts and fines broker £1.2m

The FCA found that between 1 January and 19 June 2013, WHI failed to ensure it had the proper systems and controls in place to prevent market abuse being detected or occurring.

WHI failed to ensure inside information did not leak from the private to the public side of its business or that disclosure to external parties was conducted in a controlled manner with proper safeguards in place.

Additionally, the FCA found an absence of formal risk management framework for market abuse and inadequate post-trade surveillance systems.

The FCA said the failings were particularly serious because WHI received inside information on a regular basis, and as such there was "significant scope for an adverse impact on the market and on a large number of other market participants if that inside information was mishandled".

At the time the failings took place, WHI had around 9,000 private wealth clients with approximately £2.5 billion of assets under management. WHI also had 87 corporate broking clients. Due to the lack of proper systems and controls in place, the FCA said that the firm could not protect against the risk of market abuse in respect of the information provided by these clients.

Mark Steward, director of enforcement and market oversight at the FCA, said:

“We expect all firms to have the right controls in place to mitigate risks and protect their clients and the integrity of the markets.

“In this case, WHI’s failings were aggravated by the failure to implement adequately the skilled person’s recommendations. It is one thing to be given a chance; for the chance not to be taken up is especially culpable.”