Release Date: 24th January 2014
To access the original FCA document, click here.
Summary
The Financial Conduct Authority (FCA) has imposed a significant financial penalty of £8,000,000 on 7722656 Canada Inc, formerly known as Swift Trade Inc, for engaging in market abuse. This enforcement action comes after a series of legal proceedings affirming the company’s involvement in deliberate market manipulation activities.
The case against Swift Trade began when the FCA (formerly the Financial Services Authority) issued a Decision Notice on 6 May 2011, proposing the fine for market abuse under section 123(1) of the Financial Services and Markets Act 2000. Swift Trade, alongside its former President and CEO Peter Beck, challenged the FCA’s decision by referring it to the Tribunal. The Tribunal’s decision on 23 January 2013, supported by a subsequent judgement from the Court of Appeal on 19 December 2013, confirmed Swift Trade’s engagement in the abusive practices.
Swift Trade, which was incorporated in Toronto, Ontario, had already been dissolved as of 13 December 2010. However, the Court of Appeal upheld that despite its dissolution, the company retained a sufficient residual existence, allowing the FCA to proceed with its actions against it.
This case underscores several key lessons for other firms in the financial sector. Firstly, the persistence of regulatory actions even after a company’s dissolution highlights the extensive reach of financial regulatory authorities in enforcing market integrity. Secondly, the severe penalty reiterates the FCA’s commitment to combating market abuse, emphasising the importance for all financial institutions to engage in fair and transparent market practices.
Firms are advised to maintain rigorous compliance programs to prevent market abuse, ensuring all trading activities conform to legal and ethical standards. The FCA’s decisive action in this case serves as a stark reminder of the consequences of failing to do so. Swift Trade’s case also illustrates the potential for significant legal and financial repercussions that can continue even after a firm has ceased operations.
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