A U.K.-based investment firm, Dinosaur Merchant Bank Ltd., is being sanctioned by the Financial Conduct Authority (FCA) for failing to properly guard against abusive trading in its contracts for difference (CFD) business.
According to the regulator’s enforcement notice, in June 2024, the firm launched a new direct access order execution system that generated a surge in CFD trading activity, without adequately beefing up its market surveillance systems, which left the firm unable to properly detect potentially abusive trading.
A subsequent review also found that, between June and October 2024, trades entered on the new platform generated 2,916 surveillance alerts, including 2,723 alerts related to insider dealing and 193 alerts involving other forms of potential market manipulation.
The deficiencies weren’t properly addressed until May 2025, which also “limited the firm’s ability to identify and report potentially suspicious trading,” the regulator said.
As a result, the FCA found that the firm breached several regulatory principles.
The regulator imposed a fine of £338,000 on Dinosaur Merchant Bank for failing to implement effective systems and controls to detect and report suspicious trading in its CFD business.
The firm cooperated with the FCA’s investigation and agreed to settle the case, qualifying it for a 30% discount on its fine, which otherwise would have been £482,900.