The Financial Conduct Authority (FCA) has fined interdealer broker Arian Financial £289,000 for failing to have effective controls against financial crime.

This put Arian at risk of being used to support fraudulent trading and money laundering on behalf of clients of the Solo Group, the regulator revealed.

Arian executed purported over-the-counter equity trades of approximately £37bn and £15bn in Danish and Belgian equities on behalf of the Solo Group’s clients, receiving commission of approximately £547,000.

The trading was throughout the period circular, which the FCA stated is “highly suggestive of financial crime”. The regulator said it appeared to have been carried out to allow the arranging of withholding tax reclaims in Denmark and Belgium.

This is now the seventh case brought by the FCA in relation to cum-ex trading and withholding tax schemes, and the regulator has imposed fines totalling more than £22m in relation to this trading.

“Arian failed to identify red flags which ought to have been obvious,” joint executive director of enforcement and market oversight, Steve Smart, said.

“The controls the firms we regulate have in place are an important line of defence against our financial system being abused for criminal ends. Arian’s fell short of what we expect. We are pleased that the Tribunal recognised the seriousness of Arian’s misconduct.”

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