FCA fines interdealer broker boss

The former chief executive and compliance officer of interdealer broker Martin Brokers (UK) have been fined a collective £315,000 by the UK's Financial Conduct Authority.

The former chief executive and compliance officer of interdealer broker Martin Brokers (UK) have been fined a collective £315,000 by the UK’s Financial Conduct Authority (FCA).

It follows a £630,000 fine against the company in 2014 for misconduct relating to the manipulation of the London Interbank Offered Rate (LIBOR).

David Caplin, the former chief executive was fined £210,000 while Jeremy Kraft, the former compliance officer has been fined £105,000 and both have been banned from holding positions of “significant influence” at financial firms.

In a statement announcing the fine, the FCA said it found the two executives failed to “take steps” to prevent a culture taking hold where LIBOR manipulation could take place.

The regulator said this allowed the misconduct to continue undetected for a “prolonged” period.

Georgina Philippou, acting director of enforcement and market oversight at the FCA, said: “Kraft and Caplin were responsible for setting the right culture at Martins and ensuring that the firm’s risk management systems and controls were adequate to oversee its broking activities. They failed to do this. 

“Proper systems and controls were non-existent and there was a culture at Martins where revenue came first and compliance was seen as unimportant rather than as an integral part of the running of the firm.”

Philippou said that both executives had ignored risks, which were “obvious” and resulted in “corrupt brokerage payments”.

The two executives qualified for a 30% discount in the total fine because they agreed to settle at an early stage in the investigation.

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