FCA fines UK interdealer broker £15.4 million
Tullett Prebon fined by UK watchdog for failing to conduct business with “due skill, care and diligence”
Tullett Prebon has been fined £15.4 million ($19.2 million) for improper conduct of its business and failing to have adequate risk management systems. It also failed to co-operate with the UK’s Financial Conduct Authority (FCA), the regulatory body stated.
From 2008 to 2011, a number of Tullett Prebon brokers put in place improper trades in order to generate fees that should not have been paid, the FCA said.
One of the mechanisms identified was a “wash” trade which brought unwarranted and unusually high amounts of brokerage for the firm. A wash trade “involves no change in beneficial ownership and has no legitimate underlying commercial purpose”, the FCA explained.
Senior management also wrongly believed sufficient systems and controls were in place.
Tullett Prebon failed to be open and co-operative with the FCA between August 2011 and October 2014.
This related to the FCA requesting Tullett Prebon for broker audio tapes in 2011. Although the company had most of the audio that the FCA required, it failed to produce it until 2014.
However, Tullett Prebon agreed to resolve this matter and therefore qualified for a 30% discount on the fine.
Tullett Prebon, now part of TP ICAP, is an electronic and voice interdealer broker with headquarters in London. It acts for institutional clients in the wholesale financial markets, typically investment banks.