Capital Markets Regulatory Updates
23 December: The Japanese Financial Services Agency (FSA) published its strategic priorities for July 2024 through June 2025, highlighting its commitment to advancing reforms and continuously reviewing its policy measures and tools.
18 December: The Bank of England published its Financial Market Infrastructure Report, detailing efforts in maintaining financial stability and fostering innovation through supervision of critical financial infrastructure firms. The report outlines achievements in meeting statutory objectives, implementing new regulatory powers under FSMA 2023, and advancing innovation specifically related to stablecoins and the Digital Securities Sandbox.
17 December: The U.K. Financial Conduct Authority (FCA) is consulting on a proposal for a new type of trading venue – The Private Intermittent Securities and Capital Exchange System (PISCES) – which is intended to let private companies open trading windows for employees and early investors to sell stock.
17 December: The European Securities and Markets Authority (ESMA) released its final report with regulatory technical standards and guidelines ahead of the Markets in Crypto Assets Regulation (MiCA) implementation.
16 December: The Australian Securities and Investments Commission (ASIC) published its annual dashboard outlining regulatory costs by sector and subsector for 2023-24. The total regulatory costs to be recovered by levies across all industry sectors are approximately $328 million.
12 December: The Financial Stability Board (FSB) issued recommendations on data flows and the regulation and supervision of cross-border payments to address frictions in data flows, promote fair competition between bank and non-bank payment service providers, and advance goals outlined in the G20 cross-border payments roadmap.
4 December: The U.S. Commodity Futures Trading Commission (CFTC) announced a record monetary relief exceeding $17.1 billion for fiscal year 2024, comprising $2.6 billion in civil penalties and $14.5 billion in disgorgement and restitution. In FY 2024, the CFTC initiated 58 new actions, including landmark digital asset commodities cases, fraud investigations in voluntary carbon credit markets, manipulation cases across various sectors, and significant compliance matters.
Fines & Enforcement Actions
The Comisión Nacional de los Mercados y la Competencia (CNMC) fined GESTERNOVA S.A. €6 million and AXPO IBERIA €1.5 million for manipulating the Spanish electricity market. The companies violated REMIT by engaging in quote stuffing and issuing non-genuine orders to gain advantage in executing cross-border sales with France, as revealed through algorithmic trading which aimed to monopolize the order book queue for specific energy products.
The Monetary Authority of Singapore (MAS) imposed a civil penalty of $2.4 million on a major financial institution for its relationship managers’ (RM) misconduct in 24 OTC bond transactions, where clients were charged spreads above agreed rates due to inaccurate disclosures.
The Autorité des marchés financiers (AMF) Enforcement Committee fined several entities and individuals for disseminating false or misleading information and price manipulation. Fines totaling €4,150,000 were imposed on four legal entities and three individuals, with penalties ranging from €50,000 to €300,000.
The ASIC fined Bit Trade Pty Ltd, the operator of Kraken crypto exchange in Australia, $8 million for unlawfully providing a credit facility to over 1100 customers without a target market determination. The Federal Court found that Bit Trade breached its design and distribution obligations by offering margin extensions without the necessary TMD, resulting in significant financial losses for customers.
A former accountant with Heartland Bank Limited pleaded guilty to insider trading charges brought against him by the New Zealand Financial Markets Authority (FMA). The former accountant traded, and encouraged another individual to hold, Heartland Group Holdings Limited (HGH) shares while holding material information that was not generally available to the public.
The Brazilian Securities and Exchange Commission (CVM) fined an ex-officer at IRB Brazil RE, approximately $3.2 million for stock price manipulation tied to false information about Warren Buffett’s interest. The ruling highlighted the ex-officer as the source of misinformation that led to a surge in IRB’s stock and assigned financial motivations linked to bonuses.
The FCA fined a former airline executive £123,500 for trading during restricted periods and failing to disclose his personal trades within the required timeframe.
A securities trader from Massachusetts was sentenced to 30 days in prison for his involvement in a market manipulation conspiracy spanning several years, operating on U.S. stock exchanges. The trader worked with a group of traders to manipulate securities prices by placing deceptive orders, subsequently profiting from their scheme before canceling the initial orders.
The SEC charged the former CEO of Comtech with insider trading for allegedly selling company shares based on confidential negative earnings information before their public release, avoiding losses of approximately $122,445.
The founder and former CEO of Celsius Network LLC pleaded guilty to commodities fraud and securities fraud related to fraudulent schemes at Celsius, misleading customers about the company’s success and manipulating the price of CEL token.
The SEC charged Morgan Stanley Smith Barney LLC for inadequate supervision leading to financial advisors misappropriating millions of dollars from clients. MSSB agreed to a $15 million penalty, undertakings, and a compliance review.
The SEC settled charges with two financial firms for failing to provide accurate securities trading data over several years. Each firm agreed to pay a $900,000 civil penalty, with findings revealing numerous inaccuracies and omissions in their blue sheet submissions.
The SEC charged Deutsche Bank Securities Inc. for failing to file certain Suspicious Activity Reports (SARs) in a timely manner. Deutsche Bank Securities has agreed to pay a $4 million civil penalty to settle the SEC’s charges.
The SEC charged a Florida man for manipulating securities prices in a fraudulent spoofing scheme, netting him over $380,000 in profits. The SEC charged the individual for violating antifraud provisions, resulting in a settlement where he agreed to pay $381,718 in disgorgement, $57,570.48 in prejudgment interest, and a $150,000 penalty.
The SEC charged Tai Mo Shan Limited with misleading investors about the stability of Terra USD (UST). The Commission further charged Tai Mo Shan with offering and selling securities in unregistered transactions by acting as a statutory underwriter with respect to certain of its offers and sales of LUNA, a crypto asset issued by Terraform and offered and sold as a security.
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