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TFS-ICAP pleads guilty to securities fraud, to pay $1.15M fine

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TFS-ICAP pleads guilty to securities fraud, to pay $1.15M fine

U.K.-based brokerage TFS-ICAP Ltd. and U.S. affiliate TFS-ICAP LLC pleaded guilty to one count each of securities fraud and agreed to remove two high-level managers from supervisory roles and pay a $1.15 million fine after admitting to accusations that its brokers "spoofed" the market for Latin American foreign-exchange options.

The charges stem from an investigation launched in 2015 by then-New York Attorney General Eric Schneiderman into potential manipulation in the currency market through spoofing, the practice of showing or "printing" fake trades to the market in an effort to get New York traders to buy and sell options through TFS-ICAP rather than through competitors. The practice is a violation of New York's Martin Act, current Attorney General Barbara Underwood noted in a release.

The two companies are also required to implement remedial procedures and policies, as well as remove the two managers from any role overseeing FX options brokering to New York-based traders. They will also have to install an independent monitor for two years and cooperate with the attorney general's investigation into managers and brokers at TFS-ICAP.

The attorney general noted that it received assistance from the U.S. Commodity Futures Trading Commission and the U.K. Financial Conduct Authority.

TFS-ICAP is a joint venture between Tradition Financial Services Ltd., Intercapital Ltd. and Volbroker.com Ltd. Tradition Financial Services is a unit of Switzerland-based Compagnie Financière Tradition SA, while Intercapital Ltd. is a unit of U.K.-based NEX Group PLC, the parent of and successor company to Icap PLC.