FCA bans individual

FCA has confirmed its ban on Arif Hussein following a decision of the Upper Tribunal published in June.  Mr Hussein was a derivatives trader with UBS, who engaged in internal chats with a UBS trader-submitter knowing that it would be improper to participate in conduct intended to influence UBS’ LIBOR submissions.  FCA found that Mr Hussein often informed the firm’s submitters of his preferences for sterling LIBOR rates. The Regulatory Decisions Committee rejected an argument FCA’s enforcement team had put forward that Mr Hussein had acted dishonestly in trying to influence the submissions to benefit its trading book, but found he had acted recklessly and without integrity in closing his mind to the risk that his preferences would be used in such a way. The Enforcement team pursued their case to the Tribunal.  FCA also contended that information given to it after the Tribunal reference differed significantly from previous information and that therefore one or other statement had to be false or misleading, thereby making FCA’s case even stronger.

The Tribunal reluctantly concluded that it could see no basis on which it could properly ask FCA to reconsider.  Although it may be understandable why Mr Hussein behaved the way he did (the Tribunal believed he was frightened about the potential consequences for him and then that he would not be believed if he started to tell the truth), it could not ignore the severity of his failure to be candid and truthful to both FCA and the Tribunal. That said, the Tribunal strongly recommended that Mr Hussein should not be banned from the industry indefinitely.

The Tribunal was, however, concerned that Mr Hussein was a relatively junior trader put under investigation for a limited number of chats that took place over a relatively short period, against a background of widespread manipulation of LIBOR at UBS for which senior managers bear responsibility. The Tribunal noted it was not its business to assess why FCA had not apparently targeted more senior individuals, except to note it hoped some of the statements made in the hearing on this point did not reflect reality.