FCA fines Mako £1.7m for cum-ex trading failings

The Financial Conduct Authority (FCA) has fined Mako Financial Markets Partnership £1.7m for failing to have effective controls that guard against financial crime.

The regulator also found that the firm failed to "adequately apply the policies and procedures it did have in place".

The FCA found that between December 2013 and November 2015, Mako executed purported over-the-counter equity trades on behalf of clients of the Solo Group.

These trades were worth approximately £68.6bn in Danish equities and £23.6bn in Belgian equities, with Mako receiving commission worth approximately £1.5m.

The investigation found that the trading was circular, which the FCA said is “highly suggestive of financial crime”.

The regulator added that it appears to have been carried out to allow the arranging of withholding tax reclaim in Denmark and Belgium, and several individuals have now been convicted in Denmark as part of the scheme.

Mako also failed to identify red flags in other instances related to the Solo Group business.

This involved a series of transactions which had "no obvious rationale" and resulted in the Solo Group’s controller incurring a €2m loss, to the benefit of their business associates.

Furthermore, Mako received payment from a UAE-based third party, connected to the Solo Group for outstanding debts owed by the group’s clients without performing any due diligence, which the FCA found created an increased risk of money laundering.

Joint executive director of enforcement and market oversight, Therese Chambers, said: "Mako failed to spot clear red flags and facilitated highly suspicious trading that made it vulnerable to being used to support financial crime.

"For UK financial services to grow and compete, investors need to have trust in it. That’s why it is vital we stamp out these unacceptable practices which risk the reputation and integrity of UK markets."

The case was the eighth enforcement case brought by the FCA in relation to cum-ex trading, and it has now concluded its investigations.

The regulator has worked closely with EU and global law enforcement agencies across these investigations and has imposed fines of more than £30m in relation to this trading.

Mako did not dispute the FCA’s findings and agreed to settle, meaning that it qualified for a 30% discount on its fine.



Share Story:

Recent Stories


FREE E-NEWS SIGN UP

Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.


Helping the credit challenged get mortgage ready
A rising number of borrowers are finding it harder to access mortgages due to being credit challenged - whether that’s from historic debts, a county court judgment, or having little to no credit history.

In the latest episode of the Mortgage Insider podcast, Phil Spencer is joined by Eloise Hall, Head of National Accounts at Kensington Mortgages, and Alastair Douglas, CEO of TotallyMoney.


Inside the world of high net worth lending
The mortgage market continues to evolve, and so too does the answer to the question: what is a high net worth individual in today’s market? In this episode of the Mortgage Insider podcast, host Phil Spencer is joined by Stephen Moroukian, Head of Product and Proposition for Real Estate Financing at Barclays Private Bank, and Islay Robinson, founder and CEO of Enness Global. Together, they explore what brokers really need to know when supporting high net worth individuals.

The future of the bridging industry and the Autumn Budget
MoneyAge content editor, Dan McGrath, is joined by head of marketing at Black & White Bridging, Matt Horton, to discuss the bridging industry, the impact of the Autumn Budget and what the future holds for the sector.