19 June 2018
Visit www.avoka.com

FCA slaps trader who outfoxed algos with £60k fine

22 November 2017  |  7216 views  |  0 chess

A former Bank of America Merrill Lynch trader has been fined £60,090 by the Financial Conduct Authority (FCA) for tricking algorithms into buying loans.

Bond trader Paul Walter was slapped with the market abuse fine after an FCA investigation found that on 11 occasions he entered a series of quotes on electronic trading platform BrokerTec that became the best bids for Dutch State Loans.

This meant that other traders that were using algorithms to track DSL prices increased their own bids for the loans. Walter then sold to these other market participants but cancelled his own quotes at the inflated prices.

On one other occasion, the trader flipped his trick: attracting others to follow him so he could buy DSL from them at a lower price before cancelling his own quote.

The trades occurred in July and August 2014, netting EUR22,000. Walter was suspended by BAML shortly after and left the bank in 2015.

The FCA says that while the trader did not know that his conduct amounted to market abuse, he was "negligent" in not realising this.

Mark Steward, executive director, enforcement and market oversight, FCA, says: "Market manipulation undermines market integrity and confidence. The FCA will be vigilant in detecting abusive practices and will take robust action to protect issuers and participants from all over the world from the harm caused by such abuse."

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Steve Cohen taps crowdsourced investment algos to manage up to $250m

Steve Cohen taps crowdsourced investment algos to manage up to $250m

28 July 2016  |  4624 views  |  0 comments | 6 tweets | 2 linkedin
VC firm appoints algorithm to the board

VC firm appoints algorithm to the board

19 May 2014  |  6725 views  |  3 comments | 12 tweets | 5 linkedin

Related company news

 

Related blogs

Create a blog about this story (membership required)
Visit http://go.jumio.com/finextraAdVisit https://info.nice.com/

Who is commenting?

A Finextra member Finextra Member Commented on: BIS: Cryptocurrencies...
A Finextra member Finextra Member Commented on: BIS: Cryptocurrencies...
A Finextra member Finextra Member Commented on: BIS: Cryptocurrencies...

Top topics

Most viewed Most shared
10,000 jobs could be lost to robots says Citi10,000 jobs could be lost to robots says C...
48921 views comments | 44 tweets | 35 linkedin
Ripple exec says DLT not ready for banks...yetRipple exec says DLT not ready for banks.....
10727 views comments | 9 tweets | 32 linkedin
UK launches £2.5bn startup initiativeUK launches £2.5bn startup initiative
9633 views comments | 30 tweets | 26 linkedin
HSBC promises $17bn investment in technologyHSBC promises $17bn investment in technolo...
8464 views comments | 8 tweets | 21 linkedin
NatWest taps Open Banking for cardless online paymentsNatWest taps Open Banking for cardless onl...
8108 views 11 comments | 12 tweets | 12 linkedin

Featured job

Find your next job