FSA hits ABN Amro with huge fine

Link: FSA fine BoS for ‘inadequate’ controls

ABN Amro traders distorted the closing market price of certain shares to a higher level than would otherwise have been the case on three occasions, between April and October 1998, the City watchdog said.

Instructions came to them from a US sales trader at ABN Amro Inc acting on behalf of the same US client. The stocks involved were: Carlton Communications, British Biotech, Volkswagen and Metro.

Carol Sergeant, managing director of the FSA, said: ‘These were not isolated events. The repeated nature of the breaches demonstrates the absence of a robust compliance environment on the firm’s trading floor.

‘We view with particular seriousness misconduct that occurs in the context of a firm’s inadequate investment in compliance procedures, policies and training. Investors need to be confident that they are dealing in clean and orderly markets.’

The regulator also fined ABN Amro’s then joint head of its UK equity trading desk, Michael Ackers, £70,000 for market misconduct.

Other recent cases include a £485,000 fine for Lincoln Assurance after it missold long-term savings policies, and a £985,000 fine for Royal Sun & Alliance for misselling endowment policies.

The FSA also rapped the knuckles of Marconi for failing to release price sensitive information that led to its shock profit warning in 2001.

Related reading