{"id":8596,"date":"2024-11-26T16:17:10","date_gmt":"2024-11-26T16:17:10","guid":{"rendered":"https:\/\/finderica.com\/uk-financial-watchdog-fines-macquarie-bank-13mn-for-fictitious-trades\/"},"modified":"2024-11-26T16:17:10","modified_gmt":"2024-11-26T16:17:10","slug":"uk-financial-watchdog-fines-macquarie-bank-13mn-for-fictitious-trades","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=8596","title":{"rendered":"UK financial watchdog fines Macquarie Bank \u00a313mn for fictitious trades"},"content":{"rendered":"
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Unlock the Editor\u2019s Digest for free<\/p>\n<\/div>\n

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The UK financial watchdog has fined Macquarie Bank \u00a313mn after one of its traders in London recorded more than 400 fictitious trades to hide his losses.<\/p>\n

The Financial Conduct Authority said: \u201cThe fictitious trades were not detected earlier because of significant weaknesses\u201d in Macquarie Bank\u2019s systems and controls. It added that the bank had previously been made aware of some of the weaknesses. <\/p>\n

Travis Klein, a trader on Macquarie\u2019s London metals and bulks trading desk, has been banned from the financial services industry after bypassing the bank\u2019s controls without detection for more than 20 months.<\/p>\n

The watchdog said it would have fined Klein \u00a372,000 \u201cif his application for serious financial hardship had not been successful\u201d.<\/p>\n

Klein had recorded a large number of fake trades over a 20-month period starting from June 2020 to conceal losses he had sustained. He was able to get through several key internal controls, including a daily profit and loss reporting process. <\/p>\n

\u201cThe same trader responsible for the fictitious trading was able to submit falsified broker quotes against which the profitability of their positions were assessed,\u201d the FCA wrote. <\/p>\n

Macquarie discovered Klein\u2019s strategy to hide the losses in February 2022 and incurred almost $60mn in losses unwinding his trades. <\/p>\n

The Australian bank had previously been notified of certain issues relating to its trading controls in 2020, according to the FCA. It had come up with a strategy called \u201cProject Papa\u201d to address some of the recommendations, but the regulator found it had failed to implement it properly. <\/p>\n

Klein started working as a trader at Macquarie in its Sydney offices in 2017 before moving to its London branch a year later. He devised a plan to hide his losses after he was told to de-risk his book and step back from taking any more risk for a two-week period, a process that was internally referred to as getting \u201cbenched\u201d. <\/p>\n

The plan unravelled in February 2022 during a routine internal risk controls report when Macquarie detected \u201cwhat appeared to be fictitious trading activity\u201d. <\/p>\n

Klein, who resigned the day after his trading activity was discovered, told the FCA he came up with the plan because \u201che felt he could not disappoint [Commodity Markets and Finance] supervisors\u201d. <\/p>\n

The FCA said clients and counterparties had not been affected by Klein\u2019s activity and that the fictitious trades did not directly impact the market.<\/p>\n

Macquarie said that since the incident it had \u201cimplemented a series of improvements\u201d to its controls.<\/p>\n<\/div>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Unlock the Editor\u2019s Digest for free The UK financial watchdog has fined Macquarie Bank \u00a313mn after one of its traders in London recorded more than 400 fictitious trades to hide his losses. The Financial Conduct Authority said: \u201cThe fictitious trades were not detected earlier because of significant weaknesses\u201d in Macquarie Bank\u2019s systems and controls. It<\/p>\n","protected":false},"author":2,"featured_media":8597,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[206],"tags":[3032,136,3033,191,3030,3031,36,3029],"class_list":{"0":"post-8596","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-financial-crime","8":"tag-13mn","9":"tag-bank","10":"tag-fictitious","11":"tag-financial","12":"tag-fines","13":"tag-macquarie","14":"tag-trades","15":"tag-watchdog"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/8596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8596"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/8596\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/8597"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}