Release Date: 12th August 2015
To access the original FCA document, click here.
Summary
The FCA has secured a High Court judgement awarding permanent injunctions and penalties totalling £7,570,000 against Da Vinci Invest Ltd, Mineworld Ltd, Szabolcs Banya, Gyorgy Szabolcs Brad, and Tamas Pornye for committing market abuse. The defendants were found guilty of using a manipulative trading strategy known as “layering” on 186 UK-listed shares. This strategy involved placing large and small orders to create a false impression of supply and demand, allowing the defendants to trade shares at artificial prices and profit from these manipulations.
The FCA intervened in July 2011, obtaining an interim injunction to halt the abuse and freeze the assets of the implicated companies. This case marks the first time the FCA has requested the High Court to impose a permanent injunction and penalty for market abuse. The defendants’ actions took place across multiple trading platforms, including the London Stock Exchange and various multilateral trading facilities.
Key Takeaways for Other Firms:
- Robust Monitoring Systems: Implement strong monitoring systems to detect and prevent market manipulation practices like layering.
- Maintain Market Integrity: Ensure all trading activities are conducted with integrity to uphold market confidence and proper functioning.
- Cooperate with Regulators: Provide full cooperation with regulatory investigations to demonstrate transparency and commitment to market integrity.
- Educate and Train Staff: Ensure all employees understand the importance of fair trading practices and the severe consequences of market abuse.
- Use of Technology: Utilise advanced technology to monitor trading patterns and detect any suspicious activities promptly.
By following these principles, firms can maintain market integrity, avoid significant penalties, and contribute to the fair functioning of financial markets.
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