The FSA has banned and fined a self-employed trader £700,000 for market abuse.
Barnett Michael Alexander dealt in shares and retail derivative products, such as contracts for differences and spread bets, from his home address.
The regulator says Alexander “manipulated” share prices by entering multiple small orders to buy and sell shares.
It says Alexander, who must also pay £322,818 in restitution to firms who lost out because of his actions, generated £629,130 by trading CFDs and spread bets at prices created through his manipulation.
FSA acting director of enforcement and financial crime Tracey McDermott says: “The FSA view market manipulation extremely seriously. Alexander’s behaviour was deliberate and repeated over a significant period of time.
“He sought to conceal his trading and made substantial profits at the expense of firms which allowed him to trade with them.”
Alexander claims he was unaware he was breaking FSA rules.
He says:”At no point did I realise that my actions might amount to market abuse. I developed a strategy that exploited weakness in the systems of large firms and I thought I was exploiting a trading inefficiency.
“My strategy did not mislead the rest of the market and I have paid back all the spread betting firms involved. I think this case demonstrates that there is a need for greater clarity and guidance to assist self employed traders like me to work out what is and what is not permitted by law.”