Release Date: 17th November 2015
To access the original FCA document, click here.
Summary
The Financial Conduct Authority (FCA) fined Mothahir Miah, a former Investment Analyst at Aviva Investors Global Services Limited, £139,000 and banned him from performing any function in relation to any regulated activity in the financial services industry. Mr Miah was penalised for failing to act with honesty and integrity, exploiting weaknesses in Aviva Investors’ trading systems and controls between January 2010 and October 2012 to engage in “cherry picking.”
Key Details:
- Misconduct: Mr Miah delayed the booking and allocation of trades, assessing their performance throughout the day. He allocated profitable trades to hedge funds with performance fees and less favourable trades to long-only funds with lower or no performance fees.
- Motivation: Mr Miah aimed to prove his trading ability and increase his promotion prospects in a performance-focused business culture.
- Consequences: His actions necessitated significant compensation payments by Aviva Investors to affected long-only funds. The FCA previously fined Aviva Investors £17.6 million on 24 February 2015 for related failings.
- Early Admission: Mr Miah admitted his misconduct early, cooperating with both Aviva Investors and the FCA, which resulted in a 30% discount on his fine, reducing it from £198,600 to £139,000. The FCA is also considering revoking his ban after five years upon his application due to his early admissions and remorse.
Key Takeaways for Firms:
- Maintain Robust Controls: Ensure trading systems and controls are robust to prevent exploitation and abusive practices.
- Ensure Integrity and Honesty: Uphold high standards of honesty and integrity among all staff, particularly those in significant influence functions.
- Promote Ethical Culture: Foster a business culture that values ethical behaviour over performance metrics and promotions.
- Immediate Reporting: Implement strict policies for the timely booking and allocation of trades to prevent any opportunity for cherry picking.
- Accountability and Transparency: Ensure clear accountability and transparency in trading activities and monitor for any deviations from expected practices.
By adhering to these guidelines, firms can better protect themselves from similar regulatory breaches and ensure the integrity of their trading practices.
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