CSA Partners: Compliance Blog

Regulator fines Aviva Investors £18m for control failures / Mait

24/02/2015. | This post has no Comments

The Financial Conduct Authority has hit Aviva Investors with its second largest fine on record for a UK asset manager after finding the group’s traders manipulated deals to boost their fees at the expense of customers.

The watchdog on Tuesday issued the fund management arm of Aviva, the FTSE 100 insurance and investment group, with an £18m penalty for failing to prevent an “abusive practice” known as cherry-picking for as long as eight years.

The punishment comes as the UK’s £5tn asset management industry attracts increasing scrutiny from regulators. Just last week, the FCA warned the sector was not doing enough to guard against potential insider trading and market abuse.

It forms part of a campaign by the authority to ensure financial services professionals put the interests of their clients first. In issuing the penalty on Aviva, the FCA said that ensuring asset managers manage potential conflicts of interest effectively would “continue to be an area of focus” for the regulator.

The watchdog said the failings arose as the same trading desks at Aviva Investors, which manages almost £240bn worth of assets, handled multiple funds that charged varying levels of fees.

Traders were presiding over assets for external hedge funds — which Aviva charged fees of up to 20 per cent — as well as the company’s own life insurance policyholders, according to people familiar with the matter.

Instead of booking bond trades immediately to a particular fund, they would wait to see how the positions performed — and then allocate them to the funds depending on their performance fees.

For instance, the FCA said, a trader could buy a security in the morning intending to allocate it to a hedge fund, but six hours later, after seeing it fall in value, allocate it instead to another fund that charged low or no fees.

The practices would allow the traders involved to benefit financially, as they would receive a cut of the charges.

Full story >

Implementing Measures under the Market Abuse Regulation – Publication of Responses / Martin

29/01/2014. | This post has no Comments

ESMA has today published responses to its Discussion Paper on possible implementing measures under the Market Abuse Regulation.

Stakeholders where invited to comment by 27.01.2014 ESMA’s orientations on possible implementing measures that will be of fundamental importance for the new Market Abuse framework (see earlier post).

In total 44 responses were provided by wide variety of stakeholders and associations. Contributions from compliance industry and professionals were provided by CSA Partners and Working Group of Hungarian Compliance Professionals.

ESMA will consider the feedback to the consultation within Q1 2014. ESMA will prepare consultation papers upon input of both its draft technical standards and technical advice to the Commission.

ESMA expects to further publicly consult on the draft technical advice on delegated acts in spring 2014 before submitting it to the Commission within the requested deadline.

In addition, ESMA will conduct an open public consultation before submitting its technical standards to the Commission. The date of publication of such consultation and commenting period will depend on the date of publication of the level 1 text (Market Abuse Regulation and Directive on Criminal Sanctions for Market Abuse) on the OJ.

Deadline for ESMA’s Discussion Paper on Possible Implementing Measures Under the Market Abuse Regulation / Martin

27/01/2014. Tags: , , , , , | This post has no Comments

Today was the closing date for comments to the the European Securities and Markets Authority’s (ESMA) Discussion Paper (dated 14.11.2013) on Possible Implementing Measures Under the Market Abuse Regulation. Topics of the Discussion Paper included among others the following key elements of the Market Abuse regime that is pending for renewal under the Market Abuse Regulation:

> Buyback programmes and stabilisation
> Specification of the indicators of market manipulation
> Public disclosure of inside information and delays
> Insider list
> Managers’ transactions

By using valuable views from our customers we were able to contribute to the consultation on various items considered by ESMA on insider lists and related topics of compliance management.

Download: MarketAbuseRegulations_ESMA_comments_CSA_27.01.2014 (PDF).

All contributions received by ESMA will be published shortly.

Four Charged for in U.K. FSA Insider-Trading Probe / Martin

02/12/2012. | This post has no Comments

Former Deutsche Bank AG (DBK) managing director Martyn Dodgson was among four people charged with insider trading by U.K. authorities after an investigation spanning two-and-a-half years.

Dodgson, who was employed by Deutsche Bank at the time of his arrest in March 2010, as well as Andrew Hind, Benjamin Anderson and Iraj Parvizi were charged with “conspiracy to insider deal” between Nov. 1, 2006, and March 23, 2010, the Financial Services Authority said today in an e-mailed statement. The agency alleges the men made more than 3 million pounds ($4.8 million) on improper trades.

The charges stem from an investigation into the front- running of block trades, known as Operation Tabernula, Latin for little tavern. The FSA arrested seven people and raided 16 addresses in London and southeast England in March 2010 as part of the crackdown. Two more arrests came later.

The men were all released on bail and must appear at Westminster Magistrates Court on Oct. 19.

Read more …

New York broker sentenced in $37M insider trading scheme / Martin

08/02/2012. Tags: , , , , , | This post has no Comments

A former mortgage broker was sentenced Tuesday to 2 1/2 years in prison for being the middleman in a $37 million insider trading scheme that federal authorities said was one of the longest-running ever uncovered.

Kenneth Robinson’s sentencing in U.S. District court came a day after his two co-conspirators received far lengthier sentences for their role in the 17-year conspiracy.

Former attorney Matthew Kluger, of Oakton, Va., received 12 years, the longest sentence ever handed down in an insider trading case. Former New York stock trader Garrett Bauer received nine years.

The three men admitted using advance information on company mergers provided by Kluger. Robinson, 46, of Long Beach, N.Y., knew both men separately and provided the connection between them.

Kluger admitted passing the information to Robinson, who gave it to Bauer. The trio made an estimated $37 million on trades from 2006 to 2011, according to court documents, which included $11 million on Oracle’s acquisition of Sun Microsystems in 2009.

Bauer’s attorney said in court Monday that his client made a profit of $22 million to $25 million when losses and taxes were factored in.

Read more from Yahoo >

FSA fines two more over Greenlight insider trading after David Einhorn / Siim

03/02/2012. Tags: , , , , , , , , | This post has no Comments

The Telegraph writes that two more individuals connected to US hedge fund Greenlight Capital have been fined over a multi-million pound insider-dealing case.

The City regulator fined Alexander Ten-Holter, Greenlight’s compliance officer, £130,000 and JP Morgan trader Caspar Agnew £65,000.

Both individuals were censured for failing to either identify or ask questions about Greenlight’s trading in Punch Taverns. The hedge fund sold significant tranches of Punch shares knowing the company was about to raise money, a move almost certain to drive Punch’s shares down.

Despite being told by a Greenlight analyst that the hedge fund had just spoken to Punch management and knew “secret bad things”, Mr Ten-Holter “took no steps to satisfy himself that the order was not based on inside information,” according to the FSA.

The regulator said Mr Agnew also became aware that Greenlight may have been trading on inside information but failed to act. Mr Agnew said he thought Greenlight was just “fortunate” in its timing.

Greenlight founder David Einhorn was fined £7.2m together with his fund for insider dealing. The fine’s size and action against the compliance officer shows a ramping up of FSA enforcement.

Read whole story …

Divergence in Member States’ use of sanctions under the Market Abuse Directive / Ahto

02/02/2012. | This post has no Comments
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