Britain's markets watchdog fined TP Icap PLC unit Tullett Prebon (Europe) Ltd. £15.4 million to settle an investigation into certain trades that it carried out between 2008 and 2011.
The U.K. Financial Conduct Authority found that some former managers in TP Icap's global broking division and compliance department had failed to act appropriately over improper broker conduct, and that the company had inadequate systems and controls in place that allowed improper trading to take place, including "wash" trades — risk-free trades with no commercial rationale or economic purpose on which brokerage is paid.
"While these trades did not mislead the market, nor amount to market abuse, the wash trades were entirely improper, undermining the proper function of the market," Mark Steward, FCA's executive director of enforcement and market oversight, said in a statement.
The investigation also looked into circumstances surrounding Tullett Prebon's failure in 2011 to discover certain broker audio files and to hand over them to the regulator in a timely manner, along with the company's incorrect account to the FCA as to how those audio files were discovered.
As Tullett Prebon agreed to resolve the matter, the regulator discounted its fine by 30%. The fine would have otherwise been £22 million.
The settlement will be reported as an exceptional item in TP Icap's full-year results, it noted.
