UK's Financial Conduct Authority (FCA) has warned the UK branch of US brokerage Interactive Brokers (IBUK) to take action in respect of alleged failure to report market abuse in the form of insider dealing. According to FCA, in the period from 6 February 2014 to 28 February 2015 IBUK breached Principle 3 of the FCA's Principles for Businesses, namely failed to take care and exercise control the management risk systems and to identify and report possible market abuse by its customers.
“The FCA considers that as a result IBUK failed on three separate occasions to identify and report to the FCA transactions which it had reasonable grounds to suspect amounted to market abuse in the form of insider dealing, in breach of rule SUP 15.10.2R in force during the Relevant Period”, the regulator said. On the other hand, however, FCA notes that IBUK’s senior management or other staff were not aware that its systems and controls fell short of required standards until an FCA visit to IBUK in December 2014." you should quote the whole thing, otherwise it is completely out of context and can lead to conclusions that might be incorrect.
This is quite right. Also, please excuse my commenting that your thread title saying "warns IB over alleged insider dealing" is really highly misleading!! Surely you see that "warns IB over alleged failure to report insider dealing" would be both very much more accurate and very much less prejudicial? I know it's arguably a bit pedantic to criticise over thread titles, but there'll be people who'll see that title in the forum listings and assume "IB are doing insider dealing"?!
I know they're talking about it, but people talk about these things and it never happens. The reality is that they'll find - just like PayPal did - that there are huge regulatory and bureaucratic problems involved in doing that, and it's just not worth it. (PayPal even got as far as trying it, for UK customers, at one point a few years ago, but had to withdraw the service pretty quickly.)
Back to IB bashing.... That article is about possible insider trading and possible market abuse by customers... and the FCA is basically reminding IB that they should keep a look out for those.