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Release Date: 22nd November 2017

To access the original FCA document, click here.


The Financial Conduct Authority (FCA) has fined Paul Walter, a former bond trader at Bank of America Merrill Lynch International Limited (BAML), £60,090 for engaging in market abuse. The FCA’s investigation revealed that Mr Walter manipulated the market for Dutch State Loans (DSL) on 12 occasions in July and August 2014, creating false and misleading impressions about supply and demand.

Mr Walter’s strategy involved entering a series of quotes that became the best bids on the electronic trading platform BrokerTec, misleading other market participants into following his actions with their algorithms and raising their bids. He then sold to these participants and cancelled his own quotes. On one occasion, he attracted participants to lower their offer price and then bought the DSL from them before cancelling his quote. This behaviour resulted in a profit of €22,000 for Mr Walter’s trading book.

The FCA determined that Mr Walter’s actions constituted market abuse as defined by section 118(5) of the Financial Services and Markets Act 2000, as they gave a false and misleading impression of the price and supply or demand of the DSLs, securing the price at an artificial level. Although the FCA did not find that Mr Walter was aware his conduct amounted to market abuse, he was deemed negligent for not realising this.

Key Takeaways for Other Firms:

In conclusion, the FCA’s fine on Paul Walter underscores the importance of maintaining market integrity and the FCA’s commitment to detecting and penalising abusive trading practices. Firms should take proactive steps to ensure compliance with market regulations to avoid similar penalties.

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