The FCA has fined Macquarie Bank’s London branch £13 million over poor systems and controls after non-existent recorded trades cost the firm approximately US$57.8 million.
Between June 2020 and February 2022, London metals and bulks trader Travis Klein recorded 400 fictitious trades in an attempt to hide his trading losses. Unwinding these trades cost Macquarie approximately US$57.8 million, the FCA estimated, although Macquarie maintains that these costs did not impact clients or the market.
Issues with Macquarie’s systems and controls had already been flagged to the company, but plans were not made to efficiently amend the problems. Earlier action to fix the issues could have reduced or eliminated the bank’s unwinding costs, the FCA noted.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, added: “This should serve as an example to those we regulate; risk can come from within. You need the right systems to identify it so it can be tackled early.”
Commenting on the FCA’s ruling, Macquarie said: “We have focussed significant resources on addressing learnings from the incident and implemented a series of improvements to our control environment in response to the incident.”
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