FSA gets tough with Commerzbank

Posted by admin in Risk & Regs on Wed, 28/04/2010 - 07:49
commerzbank.jpg

Commerzbank has been fined £595,000 by the Financial Services Authority(FSA) for filing inaccurate daily reports covering nearly all its London trades for the past two years.

The FSA said that 94% of Commerzbank’s trades from its London offices were either not reported or reported inaccurately. Around 1.3 million trades weren’t reported properly or at all by Commerzbank’s London office between 2007 and 2009, according to the FSA’s investigation report. 

Alexander Justham, the FSA’s director of markets, said: “Complete and accurate transaction reports are an essential component of the FSA’s market monitoring work. Commerzbank’s reporting failures could have a damaging impact on our ability to detect and investigate suspected market abuse.”
 
The FSA insisted that it had reminded Commerzbank repeatedly to check its data and find out why it was wrong over the two years but nothing had been done until senior executives became aware of the regulatory implications.
 
For its part, the investment bank has commissioned a review of its transaction reporting process and says it is committing extensive resources to improve its processes and resolve the errors.
 
The fine is the fifth  since the FSA launched a 'get tough' policy. Since last August it has fined Barclays, Credit Suisse, Getco Europe and Instinet Europe.

The Bottom Line:If Mr Cable has his way...

"If Mr Cable had his way, all the big banks would be broken up and bonuses would be virtually eliminated - a sure-fire way in my view of guaranteeing an end to the UK’s ability to compete as an international financial centre. Let’s not forget that this is a man who is on record as saying that everyone who works in a bank has an ‘aristocratic lifestyle’ clearly demonstrating his lack of understanding of the sector." A tough line on bankers’ bonuses could make a brain drain of financial talent a distinct possibility, warns Paul Marsden. Read more

Links