FCA probes traders for Brexit vote ‘spoofing’

BRITAIN’S financial watchdog is investigating three traders at an unnamed bank for engaging in market abuse around the 2016 Brexit vote.

The Financial Conduct Authority (FCA) accused the anonymous trio of ‘spoofing’ - a tactic where traders attempt to profit by placing orders on financial assets which they never intend to complete.

In this case, the traders were placing orders on complex financial contracts called futures. They placed large orders which they did not intend to complete, moving the price of the futures, before placing smaller orders which profited from the price change.

The revelation came in a warning notice, which is usually published after an internal investigation but before a formal ruling by the FCA. It said the alleged misconduct took place in June and July 2016, in the weeks before and after the vote to leave the European Union on June 23.

The FCA said the three traders were acting both individually and together, but it declined to comment further.

On the night of the vote, sterling rose above $1.50 for the first time in six months after Nigel Farage conceded defeat and predicted that Remain had won.

But as the results started to come through, the pound dived to $1.32 in one of the largest crashes of any major currency since the birth of the modern global financial system.