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Global Regulators Looking Past the CCO

1) Canadian Regulator: you “ought to have known” your traders where spoofing.

 2) NY: Broker Dealer removes 2 from their supervisory role.

 3) CFTC: Adds new Regulation Algorithmic Trading with new role of “AT Person”

4) FCA: Adds new new watch on senior managers

5) FINRA: Supervisor barred from supervising after case of market manipulation


Globally, my peers in the industry seem to all agree that the liability of managers is greatly increasing. Consider the following news:

 The Canadian regulator’s settlement states: “While Pang did not know that certain Oasis traders were engaged in manipulative trading, he ought to have known. Pang, as a director and officer of Oasis, failed to adequately monitor trading activities at Oasis and ensure there was an adequate compliance structure in place to identify and prevent possible manipulative trading, thereby indirectly engaging or participating in an act, practice or course of conduct relating to securities that he ought reasonably to have known resulted in or contributed to a misleading appearance of trading activity in, or an artificial price for a security…

 A result of a current SEC settlement in NY resulted inpersonnel changes after the lawsuit was filed by removing two employees in the electronic trading group from their supervisory roles.” as reported on Reuters.

 The CFTC has recently released Regulation Algorithmic Trading (REG-AT). In this new regulation there are additional requirements for registering “AT Persons” and their supervision. Furthermore, US Regulators are seeking greater budgets that will allow them to expand their surveillance.

 Reuters reported that “Britain is introducing a new certification and senior managers regime next month, requiring bank staff whose jobs involve some degree of risk-taking to be directly accountable for their actions.”

 A well written article on The Street regarding Spoofing stated the following: "Compliance isn't the purview of the Chief Compliance Officer alone; all broker-dealer leaders are responsible for nurturing an environment that prioritizes safe, ethical trading."

 FINRA suspends a supervisor for failure to oversee market manipulation activities of a trader. “The branch office manager, who was the first line of defense in supervising ..., completely failed to supervise his transactions to ensure compliance with securities laws and FINRA rules."





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