Wall Street broker fined for scrutiny failure

THE City watchdog has fined Wall Street broker BGC Partners nearly £5m for failing to properly monitor its traders.

The Financial Conduct Authority (FCA) said that between July 2016 and January 2018, BGC and two smaller companies it owns – GFI Brokers and GFI Securities – didn’t have proper processes in place to detect suspicious trading. That led to a heightened risk that rule-breaking would go undetected.

The FCA said: “Multiple red flags were raised to the senior management bodies of both BGC and GFI. Such issues were frequently striking in the level of the risk articulated and the need for immediate assessment, yet were not properly discussed nor were actions recorded by BGC/GFI’S boards and committees. Moreover, such matters frequently lacked proper evaluation or detailed action plans when presented.”

BGC is headquartered in New York but employs more than 600 brokers in Canary Wharf.

It is known for its annual charity day when celebrities man its brokers’ phones and the proceeds of trades are donated to a fund for relatives of victims of the 9/11 terrorist attacks in New York. Attendees of the event in London this year included television presenter Holly Willoughby and former England manager Sam Allardyce.

The broking giant purchased GFI in 2016. GFI is run separately, but is part of the wider BGC organisation and shares the same compliance team.

BGC was given a 30pc discount on the fine as it agreed to resolve the case at an early stage.

There is no suggestion that the failure to set up appropriate controls led to suspicious trading. The regulator added that BGC and GFI had improved their controls in this area since the start of the investigation. BGC Partners was contacted for comment.