Merrill Lynch International gets record fine from the FCA
Merrill Lynch International has escaped a fine of nearly £19m but must still pay up a record penalty of over £13m due to transaction reporting failures.
The FCA has fined the firm £13,285,900 – which could have been nearly £7m higher - had it not settled early in the investigation.
The penalty was issued for incorrectly reporting 35,034,810 transactions and failing to report another 121,387 transactions between November 2007 and November 2014.
It becomes the highest fine imposed for transaction reporting failures to date.
Officials said this reflected the severity of MLI's misconduct.
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The regulator said there had been a "failure to adequately address the root causes over several years despite substantial FCA guidance to the industry".
The company had shown a "poor history of transaction reporting compliance, consisting of a Private Warning issued in 2002 and a fine of £150,000 in 2006", it added.
The FCA has used a penalty of £1.50 per line of incorrect or non-reported data for the first time rather than the £1 per line used in the three most recent transaction reporting cases.
Past fines had not been high enough to "achieve credible deterrence", the FCA stated.
Georgina Philippou, FCA acting director of enforcement and market oversight, said:
"Proper transaction reporting really matters. Merrill Lynch International has failed to get this right again – despite a Private Warning, a previous fine, and extensive FCA guidance and enforcement action in this area.
"The size of the fine sends a clear message that we expect to be heard and understood across the industry.
"Accurate and timely reporting of transactions is crucial for us to perform effective surveillance for insider trading and market manipulation in support of our objective to ensure that markets work well and with integrity."