FCA has fined Linear Investments Limited £409,300 for the firm’s breach of Principle 3 by failing to take reasonable care to organise and control its affairs responsibly and effectively. In particular, FCA found the firm lacked adequate risk management systems for detecting and reporting potential market abuse.
The level of the firm’s trades was at a level not capable of proper monitoring for a period of over 2 years. the firm relied on post-trade surveillance from its brokers to whom it routed trades. FCA said this did not detract from Linear’s responsibility to have effective systems in place. The firm agreed all issues of fact and liability but disputed the penalty. After appeal to the Tribunal, the penalty amount was, however, confirmed.