The central bank has imposed a €452,790 fine on the Irish unit of US investment group Cantor Fitzgerald for failing to report suspicious transactions that could indicate market abuse.
From March 2017 to June 2023, Cantor repeatedly failed to record or report any questionable orders or transactions.
The regulator found that the firm also lacked effective governance mechanisms and failed to properly document its assessments of potential market abuse. Following enforcement action by the central bank, Cantor admitted its violations.
The investigation found six instances between September 2017 and May 2022 where Cantor’s trade monitoring system flagged potentially suspicious trades. Despite clear signs of market abuse, Cantor failed to report them, thereby demonstrating “recklessness” by failing to file suspicious transaction and order reports (STORs) with the regulator.
Cantor created the STOR committee to review suspicious transactions, but its work proved ineffective.
The central bank also pointed to Cantor's failure to keep adequate records to explain why some transactions were not recorded. The company's brokers ignored the need to escalate suspicious comments made by clients when placing orders, further undermining market integrity.
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Colm Kincaid, the Central Bank’s director of compliance, said firms must have robust systems in place to report potential market abuse, stressing that such deficiencies undermine market confidence and fair competition. He called on all financial institutions to review their STOR processes in light of the deficiencies identified at Cantor.
While the fine was initially €646,840, it was reduced by 30 percent as part of the agreement. Cantor has since confirmed that it has fully addressed its deficiencies as of June 2023.
The longtime head of the broader Cantor Fitzgerald group, Howard Lutnick, was named commerce secretary in Mr. Trump’s administration last week, leaving behind his role as chairman and chief executive of the group that has run the business for four decades.
Cantor's Irish arm was led by Ronan Reid from 2012 until the end of 2023, after the US group acquired Dolmen Stockbrokers, which he had previously led. He was replaced by Gerard Casey.
Sourse: breakingnews.ie
