Release Date: 8th January 2018
To access the original FCA document, click here.
Summary
The Financial Conduct Authority (FCA) has fined Neil Danziger, a former Royal Bank of Scotland (RBS) interest rate derivatives trader, £250,000 and banned him from performing any regulated financial activity. The FCA found Danziger guilty of failing to uphold proper market conduct standards and deemed him unfit for the financial services industry due to his reckless and unethical behaviour.
Key findings include:
- Manipulation of JPY LIBOR Submissions: Danziger made requests to RBS’s primary submitters to influence submissions in favour of his trading positions. Additionally, he considered these positions when acting as a substitute submitter and sought a broker’s help to manipulate other banks’ JPY LIBOR submissions.
- Engagement in Wash Trades: Between September 2008 and August 2009, Danziger entered into 28 wash trades. These risk-free trades, executed with no legitimate commercial purpose, were aimed at facilitating brokerage payments in return for personal hospitality.
Mark Steward, the FCA’s Executive Director of Enforcement and Market Oversight, emphasised that such reckless disregard for market standards is unacceptable in the financial services industry. The significant fine and ban underscore the FCA’s commitment to maintaining the integrity of the UK financial system.
Key Takeaways for Other Firms:
- Adherence to Market Standards: Firms must ensure all employees adhere to established market conduct standards to maintain market integrity.
- Vigilance Against Manipulative Practices: Implement robust monitoring to prevent and detect attempts to manipulate financial benchmarks like LIBOR.
- Ethical Conduct: Encourage a culture of integrity and ethical behaviour within the organisation.
- Comprehensive Training: Regular training for employees on regulatory expectations and ethical standards.
- Strong Internal Controls: Establish and enforce strong internal controls to prevent improper trading practices and conflicts of interest.
In conclusion, the FCA’s action against Neil Danziger serves as a critical reminder of the importance of maintaining high standards of conduct in the financial services industry. Firms must take proactive measures to ensure compliance with regulations and promote ethical behaviour to avoid severe penalties and protect market integrity.
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