The Financial Conduct Authority has fined hedge fund chief investment officer Corrado Abbattista £100,000 for market abuse and banned him indefinitely from performing any regulated activity functions.

Mr Abbattista was a portfolio manager, partner and chief investment officer at Fenician Capital Management LLP.

Following an investigation, the FCA found that Mr Abbattista, an experienced trader, had engaged in market abuse.

He created a “false and misleading impression” about the supply and demand for equities between 20 January and 15 May 2017. 

On multiple occasions, he placed large “misleading” orders for Contracts for Difference (CFDs), referenced to equities, which he did not intend to execute.

At the same time, he placed smaller orders that he did intend to execute on the opposite side of the order book to the misleading orders.

Through his misleading orders, Mr Abbattista falsely represented to the market an intention to buy/sell when his true intention was the opposite, the FCA said.

Mr Abbattista was aware of the risk that his actions might constitute market manipulation, but “recklessly” went ahead with those actions anyway, the watchdog found.

The trading undertaken by Mr Abbattista was identified by the FCA’s internal surveillance systems.

The FCA analyses order book data from the leading UK equity trading venues and then runs surveillance algorithms, designed to identify potentially abusive behaviours.  

Mr Abbattista referred the matter to the Upper Tribunal but his reference was withdrawn on 10 November 2020. 

Mark Steward, executive director of enforcement and market oversight, said: “Market manipulation is corrosive of market integrity, undermining clean, efficient and fair markets. The FCA has increased its capability to detect and take robust action against the harm to shareholder value caused by such abuse.”

The FCA says that the fine and ban reflect the serious nature of the breach set out in the Final Notice and should act as a deterrent to other market participants.