Three traders have been fined and banned after the U.K.’s Upper Tribunal upheld the Financial Conduct Authority’s (FCA) findings that they engaged in manipulative trading.
In 2022, the FCA ordered sanctions against Diego Urra, Jorge Lopez Gonzalez and Poojan Sheth, who worked at Mizuho International plc, for allegedly engaging in market manipulation in Italian government bond futures in 2016.
The regulator found that they engaged in “spoofing” by entering large orders they didn’t intend to execute, to create a false perception of trading interest and benefit the execution of their smaller, legitimate orders.
They appealed the findings to the Upper Tribunal, which has now sided with the FCA, concluding the trading was manipulative.
According to the decision, the traders didn’t dispute the details of the trading, but insisted the trades weren’t manipulative.
“They deny they committed deliberate market abuse, and submit they did not act dishonestly or lack integrity,” the tribunal said in its ruling.
They claimed their trading was part of a legitimate strategy and that they didn’t collude to manipulate markets.
The tribunal rejected their defence. It concluded each trader deliberately engaged in market abuse and that their conduct was dishonest and lacked integrity.
In addition to upholding the FCA’s findings on liability, the tribunal also endorsed the proposed penalties — banning the traders from the industry and imposing fines ranging from £57,600 to £223,400.
The traders have 14 days to appeal the decision.
“We’re taking action against those who abuse our markets. These traders sought to undermine its integrity by attempting to trick the market to benefit their own positions. We’re pleased the tribunal found they’re not fit to work in financial services,” said Steve Smart, joint executive director of enforcement and market oversight at the FCA, in a release.