Tfs icap
In contrast, the FX options market for emerging market currencies, such as Latin American currencies, tends to be comparatively illiquid. The FX options market for these currencies is comparatively liquid. The majority of FX options trading involves currency pairs of the major industrialized economies, including the U.S. The FX options market is primarily an inter-bank market. “Our investigation into fraudulent conduct in the foreign exchange currency options market continues.”Ī foreign exchange currency option, also known as an FX option, is a financial instrument that confers the right to buy or sell a fixed amount of a specified currency at a specified exchange rate on or before a specific expiration date. “My office will pursue financial frauds – no matter how sophisticated – and hold financial institutions accountable for their conduct,” said Attorney General Underwood. In addition to the criminal pleas, both companies executed a civil settlement agreement with the Attorney General’s office, which requires them to implement remedial procedures and policies, retain an independent monitor for two years, remove two high-level managers from any supervisory role related to the brokering of foreign exchange currency options to New York traders, pay $1.15 million in penalties, and cooperate in the Attorney General’s ongoing criminal investigation of managers and brokers at TFS-ICAP LLC and TFS-ICAP LIMITED. Today, before New York City Criminal Court Administrative Judge Kevin McGrath, each company pleaded guilty to one count of securities fraud under New York’s Martin Act. NEW YORK – Attorney General Barbara Underwood announced the criminal convictions of brokerage firms TFS-ICAP LIMITED and TFS-ICAP LLC for posting fake trades in emerging market foreign exchange currency options to New York-based traders. The market should also take notice that the opacity of such practices, while forensically challenging, is no bar to action either.News from the New York Attorney General's OfficeĪttorney General's Office Press Office / Brokerage Firm TFS-ICAP LIMITED, and Its U.S.-Based Affiliate TFS-ICAP LLC, Plead Guilty to Securities Fraud for Posting Fake Trades in Emerging Market Foreign Exchange Currency OptionsĬompanies Must Implement Remedial Procedures Verified by Independent Monitor, Remove High-Level Managers, Pay $1.15 Million in Penalties, and Cooperate in AG’s Ongoing Criminal Investigation of Managers and Brokers at TFS-ICAP Mark Steward, executive director of enforcement and market oversight at the FCA, said: "This market should take notice that printing, or providing information to clients where the basis for the information is not true, is not in keeping with appropriate standards of market conduct. Without this discount, the FCA would have imposed a financial penalty of £4.92 million. TFS-ICAP agreed to resolve this case with the FCA, thereby qualifying for a 30% discount to the overall financial penalty imposed. TFS-ICAP also had shortcomings in its oversight and compliance arrangements to detect and counter the risk of brokers providing price or quantity information on the basis that it was based on actual trades when these had not taken place. Neither were there any records to evidence the practice which, according to the FCA, meant the investigation had to establish the existence of a practice that was opaque and unrecorded in any of TFS-ICAP’s records. As such, TFS-ICAP did not observe proper standards of market conduct.įurthermore, TFS-ICAP did not react to warning signs that printing might be taking place or act to address the risk of it, and so failed to act with due skill, care and diligence. Printing trades sought to encourage clients to trade when they might not have done, to generate business for TFS-ICAP. TFS-ICAP brokers, across multiple broking desks, did this openly and over a prolonged period. This involved brokers communicating to their clients that a trade had occurred at a particular price and/or quantity when no such trade had actually taken place. The regulator's investigation found that between 20, brokers at TFS-ICAP carried out the practice of ‘printing’ trades. The FCA has fined TFS-ICAP, an FX options broker, £3.44m for communicating misleading information to clients.