FIN.

FCA fines Arian Financial for failings relating to cum-ex trading

The FCA has fined Arian Financial LLP £288,962.53 for financial crime systems and controls failures.

The firm’s failure to implement adequate measure put it at risk of being used to support fraudulent trading and money laundering on behalf of clients of the Solo Group, a group of four authorised entities. Arian had executed purported over-the-counter equity trades of around £37bn and £15bn in Danish and Belgian equities on behalf of these clients, receiving approximately £547,000 in commission. The trading was circular, and therefore highly indicative of financial crime.

The trades also appear to have allowed withholding tax reclaims in Denmark and Belgium, as in 2014 and 2015, the Solo Group made reclaims of approximately £899m and £188m to Danish and Belgian authorities, with approximately £846m and £42m respectively paid.

Arian admitted liability, but referred the FCA’s proposed fine of £744,745 to the Upper Tribunal for review. The Upper Tribunal agreed with the seriousness of the misconduct and need for a penalty, but reduced the fine on the basis that the financial benefit the firm received should be net of certain fees it paid to the Solo Group and the broker in respect of the relevant trades.

Laura Wiles