FCA has fined Paul Walter, a bond trader formerly with Bank of America Merrill Lynch International, £60,090 for market abuse. It found Mr Walter created a false and misleading impression about the supply and demand in the market for Dutch State Loans, and did so 12 times in summer 2014. Mr Walter had entered a series of quotes on a trading platform that gave the impression he was a buyer, which made other market participants, who were tracking his quotes, raise their bids. Mr Walter then sold to those participants and cancelled his own quote – thereby actually selling after giving the impression he wanted to buy. On other occasions he bought from participants who had recently lowered their offers and then cancelled his quote. He knew traders followed him using algorithms to follow best bids and offers. Overall, his conduct resulted in a profit of €22,000 to his trading book.
FCA did not prove Mr Walter knew his conduct was market abuse, but said he was negligent not to realise it. BAML had suspended Mr Walter, who had been a CF30 function holder, in August 2014.