FCA fines experienced trader for market abuse £100,000

December 15, 2020

An experienced trader at Fenician Capital Management has been slammed with a £100,000 fine and prohibited from working in any regulated activity after allegedly engaging in market abuse.

Corrado Abbattista is formerly a portfolio manager, partner and chief investment officer at Fenician Capital Management and, according to a Financial Conduct Authority (FCA) investigation, he committed market abuse between January and May 2017 by creating a false and misleading impression as to the supply and demand for equities.

The report alleged that Abbattista on multiple occasions placed large misleading orders for contracts for difference, referenced to equities, which he did not intend to execute.

It further claims that the trader placed smaller orders at the same time that he did intend to execute on the opposite side of the order book to the misleading orders. Through his large misleading orders, Abbattista falsely represented to the market an intention to buy/sell when his true intention was the opposite, according to the FCA.

“Market manipulation is corrosive of market integrity, undermining clean, efficient and fair markets,” said Mark Steward, executive director of Enforcement and Market Oversight at the FCA. “The FCA has increased its capability to detect and take robust action against the harm to shareholder value caused by such abuse.”

Abbattista had referred the case to the upper tribunal, but his reference was withdrawn on November 10, 2020, the FCA said.

The FCA considers that the fine and the prohibition imposed reflect the serious nature of the breach set out in the final notice and should act as a deterrent to other market participants.

“This is FCA’s very first market abuse outcome under the EU Market Abuse Regulation, which went live in July 2016,” said Nick Bayley, managing director and head of UK regulatory consulting of Duff & Phelps. “We can see from its annual report that the regulator had 29 market manipulation cases open as at 31 March this year, so hopefully other outcomes will follow quickly in its wake.

“In terms of new lessons from this case, there are relatively few. Layering and spoofing like this has been around a long time and is probably the most regularly sanctioned form of market manipulation around the globe, with the CFTC in particular producing numerous outcome very similar to this.”