UK financial regulator The FCA has published a Decision Notice today in respect of Corrado Abbattista, an experienced trader and a portfolio manager, partner and Chief Investment Officer at Fenician Capital Management LLP for market abuse. The FCA imposed a financial penalty of £100,000 against Mr Abbattista, also prohibiting him from performing any functions in relation to regulated activity.
Mr Abbattista has referred the Decision Notice to the Upper Tribunal where he and the FCA will each present their cases. The Tribunal will then determine what, if any, is the appropriate action for the FCA to take, and will remit the matter to the FCA with such direction as the Tribunal considers appropriate for giving effect to its determination. Accordingly, the proposed action outlined in the Decision Notice will have no effect pending the determination of the case by the Tribunal.
The FCA said it considers that between 20 January and 15 May 2017, Mr Abbattista repeatedly placed in the market large misleading orders for Contract for Differences (CFDs), referenced to equities, which he did not intend to execute. At the same time, he placed smaller orders that he did intend to execute on the opposite side of the order book to the misleading orders.
Through his large and misleading orders, Mr Abbattista falsely represented to the market an intention to buy/sell when his true intention was the opposite. At the same time, his misleading orders were for volumes of shares far greater than the typical market size, which would also have created a false and misleading impression regarding the true supply of and demand for the shares in question to other market participants.
The FCA stated that Mr Abbattista was aware of the risk that his actions might constitute market manipulation, but recklessly went ahead with those actions anyway.
The trading undertaken by Mr Abbattista was initially identified by the FCA’s internal surveillance systems. The FCA ingests order book data from the leading UK equity trading venues and then runs surveillance algorithms, designed to identify potentially abusive behaviours, across that consolidated data set.
The FCA considers that the fine and the prohibition sought reflect the serious nature of the breach set out in the Decision Notice and should act as a deterrent to other market participants.