Cantor Fitzgerald Ireland fined €453k for market abuse

Failings occurred over a six-year period between March 2017 and June 2023

The Central Bank said Cantor failed on a number of occasions to report identified suspicious transactions that may have indicated market abuse.

The Central Bank of Ireland fined Cantor Fitzgerald Ireland €452,790 pursuant for a breach of the US stockbroker's obligations under the Market Abuse regulations.

The Central Bank said Cantor failed on a number of occasions to report identified suspicious transactions to them that may have indicated market abuse. "Cantor failed to put in place effective governance arrangements to detect and report suspicious orders and transactions that may have indicated market abuse," the authority said.

"Cantor also failed to consistently document its analysis as to whether it considered certain orders and transactions to be suspicious and failed to consistently escalate suspicious transactions internally." The failings occurred over six years between March 2017 and June 2023. Cantor has admitted to the breach.

Market abuse includes insider dealing, unlawful disclosure of inside information and market manipulation.

The Central Bank determined the appropriate fine to be €646,840, which was reduced by 30% by way of a settlement discount.

In their investigation, they identified six sample occasions of particular concern where Cantor’s trade surveillance system detected potentially suspicious transactions and assessed whether Cantor should report them. On each occasion, based on the information being assessed, Cantor was reckless in failing to submit a STOR to the Central Bank as it knew or ought to have known of the risk it would breach of regualtions.

In 2012, Cantor established a ‘STOR Committee’ as part of its governance arrangements which it was not obliged under Irish market abuse law. On occasion, the operation of the STOR Committee impeded the consistent reporting of suspicious transactions, the Central Bank found.

The investigation found the committee applied unsound rationales and criteria in assessing orders and transactions. The committee was also inconsistent in its approach, failed to documents its analysis and brokers at Cantor also failed to escalate to escalate suspicious comments made by customers in two instances.

"Firms are required to identify and report to the Central Bank any suspicious transactions or orders (STORs) that may indicate potential market abuse," Colm Kincaid, the Central Bank’s Director of Enforcement said.

"This legal requirement is a key safeguard in our system to protect securities markets from abuse and firms must have processes in place that are effective to ensure STORs are reported."

The Central Bank said Cantor confirmed it had remediated the failings identified during this investigation by June 2023.

A spokesperson for Cantor Fitzgerald Ireland said: "We are pleased to have resolved this matter with the Central Bank of Ireland related to issues which were fully remediated by June 2023."