FCA Libor Fines, Parr on Banks, Private Equity: Compliance
(Bloomberg) — The U.K. Financial Conduct Authority issued its first fines for interest-rate rigging against individuals and barred the former chief executive and compliance officers at Martin Brokers (UK) Ltd. from the industry.
David Caplin, former CEO of the London-based interdealer broker, was fined 210,000 pounds ($319,000) and ex-compliance officer Jeremy Kraft 105,000 pounds, the FCA said in a statement Thursday. Both have been banned from holding positions with significant influence in the financial services industry.
Martin Brokers was fined 630,000 pounds by the FCA last year for rigging the London interbank offered rate. Brokers at RP Martin Holdings Ltd., part of Martin Brokers, colluded with a trader at UBS Group AG to manipulate Libor tied to the Japanese yen, the FCA said at the time.
Martin Brokers didn’t respond to a request for comment. Kraft didn’t respond to e-mails seeking comment, and contact information for Caplin wasn’t available through online directories.
Courts
Capital One Workers Accused of Using Client Credit-Card Data
Two former employees of Capital One Financial Corp. were accused of using customer credit-card data to trade on stocks in three companies, according to U.S. regulators.
Bonan Huang, 32, of Glen Allen, Virginia, and Nan Huang, 36, of Richmond, Virginia, used their employer’s nonpublic database of sales information to make the trades, the Securities and Exchange Commission said in a lawsuit filed Wednesday in Philadelphia federal court.
The agency didn’t identify Capital One or the target companies in its filing, but Capital One confirmed that the accused both worked there. They were fired Jan. 16, according to the complaint.
“We’ve been working closely with the SEC on this investigation, which involves two former employees,” Tatiana Stead, a spokeswoman for the McLean, Virginia-based bank, said in a phone interview.
In three years beginning in January 2012, the men made about $2.8 million on a $147,300 investment, a return of about 1,800 percent, trading in six online accounts, according to the complaint. The SEC is seeking disgorgement of the trading profits and a civil penalty of as much as three times those profits.
Neither could be immediately located for comment.
The case is SEC v. Huang, 15-cv-00269, U.S. District Court, Eastern District of Pennsylvania (Philadelphia).
Interviews/Commentary
Gary Parr Sees Pressure Building on Banks to Break Up
Gary Parr, vice chairman of Lazard Ltd., talked about the outlook for the banking industry and financial regulation.
There’s a slow-moving “Darwinian exercise” of banks watching each other as pressure builds from capital requirements and regulatory burdens, he said.
Parr spoke with Tom Keene from the World Economic Forum’s annual meeting in Davos, Switzerland, on Bloomberg Television’s “Surveillance.”
For the video, click here.
Private-Equity Firms End Worst Violations, SEC Official Says
Private-equity firms, which three years ago became subject to oversight by the U.S. Securities and Exchange Commission, have fixed some of their worst deficiencies although their transparency could still improve, an SEC official said.
“The pace of change has been surprising,” Igor Rozenblit, the agency’s co-head of private-funds compliance inspections and exams, said Thursday in New York at the Private Equity International’s CFO-COO Forum 2015. “I don’t think we’re there yet, but transparency has improved markedly. Some of the more objectionable issues are just ending.”
The SEC last May shocked the industry by saying it found illegal fees or severe compliance shortfalls in more than half of the firms it examined since starting a review of the $3.8 trillion market in 2012.
The agency, which ended its initial examinations in October and is working on a report about its private-equity findings, will also start looking beyond buyout managers at firms that invest in similar alternatives to stocks and bonds, Rozenblit said.
–With assistance from Suzi Ring in London, Devin Banerjee in New York and Sophia Pearson in federal court in Philadelphia.
To contact the reporter on this story: Carla Main in New York at cmain2@bloomberg.net To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net David Glovin, Andrew Dunn
