FCA Fined Citigroup's International Broker-Dealer £12.6 Million For Failing To Detect Market Abuse

Citigroup Global Markets was unable to successfully monitor its trading activity for certain forms of insider dealing and market manipulation because it failed to properly execute the MAR trade monitoring standards.

MAR was implemented in 2016 and increased the standards for detecting and reporting suspected market abuse. It mandated the monitoring of both orders and transactions to identify potential and attempted market abuse across a wide variety of markets and financial instruments.

The FCA discovered, however, that Citigroup Global Markets failed to effectively execute the new requirement when it went into force, taking 18 months to identify and analyze the precise market abuse risks to which its firm was exposed and which it needed to detect.

The faulty implementation of Citigroup Global Markets resulted in substantial holes in its structures, systems, and processes for enhanced trading monitoring.

Executive Director of Enforcement and Market Oversight, Mark Steward, stated:

The framework for market integrity is dependent on the FCA's collaboration with market players who use data to identify illicit activity. Citigroup Global Markets did not carry its full weight in this collaboration by not fully adopting the additional measures when necessary, affecting market integrity and the overall identification of market abuse.'

Citigroup Global Markets agreed to settle this dispute for a 30% discount. The fine would have been £17,934,030 without the reduction.

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