FIN.

FCA levies further fine for cum-ex trading controls

FCA has fined Sunrise Brokers LLP £600,000 for poor AML systems and controls in relation to cum-ex trading, dividend arbitrage and withholding tax reclaim schemes.  It found the firm did not properly identify and mitigate the risk of facilitating fraudulent trading and money laundering in relation to business introduced during 2015 by the Solo Group. FCA found the relevant trading had a circular pattern of purported trades, but the firm failed to identify the risks of this, in particular in respect of 2 instances – one where a trade was executed at nearly twice the prevailing market price of the stock and one where it accepted payment from a UAE-based entity related to Solo in respect of debts of Solo clients.

FCA found breaches of Principles 2 and 3.

Emma Radmore