The Financial Conduct Authority (FCA) has announced a fine of £3.44 million against foreign exchange options broker TFS-ICAP Ltd for market misconduct in which the broker communicated false information to clients in relation to Trading Star.

The official notification said that between 2008 and 2015, the broker, TFS-ICAP, engaged in the practice of "faking" trades, telling clients that trades were being made at a specific price or volume, even though no such trades had actually been made, a practice known as the "printing" industry. And conduct similar operations openly, long-term, and repeatedly. TFS-ICAP's move violates market conduct standards.

A broker has been fined £3.44m by the FCA for market misconduct

The purpose of fake transactions is to encourage clients to make transactions when they might not otherwise, creating business for TFS-ICAP. In addition, TFS-ICAP failed to take appropriate measures in a timely manner after being alerted to the falsification of order information. TFS-ICAP also has weaknesses in its oversight and compliance arrangements to effectively monitor and prevent the risk of brokers fudging information such as transaction prices and volumes.

Mark Steward, executive director of enforcement and market surveillance at the FCA, said:

"TFS-ICAP should note that the practice of providing false information to customers is not consistent with market conduct standards. And while the practice is difficult to define and prosecute, it doesn't mean regulators can't take enforcement action against it."

The FCA also thanks the U.S. Commodity Futures Trading Commission for its assistance in this investigation.

By agreeing to settle with the FCA, TFS-ICAP's total fine could be reduced by 30%, without which TFS-ICAP would have been fined £4.92 million.