LCG Cyprus fined €40.000 by CySEC for market abuse concerns

Accurate details of the settlement have not yet been made public, but the violations were related to the general principals of the article 16(2) of Regulation (EU) 596/2014. This article addresses investment firms that operate a trading venue to establish arrangements, systems and procedures aimed at preventing and detecting market manipulation and insider trading.

The CySEC statement confirms this meaning, adding that the deficiencies, cited in the regulator’s order against London Capital Group (Cyprus) Ltd, concerns market abuse “as further specified “in Articles 2 and 3(8) of the Delegated Regulation (EU) 2016/957 supplementing Regulation (EU) 596/2014.”

The watchdog further explains that the company “does not maintain effective arrangements and procedures to detect and report suspicious orders and transactions, which also ensure the monitoring those.”

In deciding the disciplinary action, the authority considered it needed to send a clear deterrent message about LCG’s lapses and highlight weaknesses in supervision systems covering the staff’s handling of trading activities.

After several months of pause, the Cypriot regulator is once again flexing its muscles and actively finding compliance irregularities. Moreover, CySEC has suspended several forex brokers that were caught up in promoting their risky products in the UK.

Following such settlements, CySEC often orders the company to take corrective measures within a set framework. However, the regulator confirmed that London Capital Group (Cyprus) already paid the settlement fees and since such agreements are usually announced within six months of an inspection, the majority of issues should have already been resolved.

Furthermore, it noted that all amounts payable from settlement agreements are considered revenue of the Treasury Department and do not go to CySEC’s pocket.