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Tribunal upholds £8m Swift Trade FSA fine

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The Upper Tribunal has upheld an FSA decision to fine Canadian trading platform Swift Trade £8m for market abuse.

The FSA announced the fine in August 2011 for “layering”, a form of manipulative trading.

Between 1 January 2007 and 4 January 2008, the regulator says Swift Trade’s trading caused a succession of small price movements in a wide range of individual shares on the London Stock Exchange from which the firm made substantial profits. The regulator says these profits are in excess of £1.75m.

Swift Trade referred the matter to the Upper Tribunal.

Swift Trade obtained a High Court injunction in June 2011 to restrain publication of the decision notice. That injunction concluded on 16 August 2011 following the tribunal’s decision of 2 August 2011 that rejected an application for prohibition of publication of the decision notice.

On 26 August 2011, the High Court dismissed a further application for an interim injunction to restrain the FSA from publishing the decision notice.

FSA director of enforcement and financial crime Tracey McDermott says: “This was a particularly cynical case where a business model was based on market abuse.

“The approach taken by Swift Trade was novel and complex, designed to allow them to benefit at the expense of other market users, and to make detection more difficult.”

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