Wednesday, 27 November 2024
by BD Banks
The regulator said that between June 2020 and February 2022, Travis Klein, a trader at the bank, was able to record and conceal these fraudulent trades to mask his mounting losses.
Despite previous warnings about weaknesses in its systems, Macquarie Bank failed to implement effective measures to prevent such misconduct, according to the FCA.
“Despite knowing of the weaknesses, MBL failed to put effective and timely plans in place to fix them,” the FCA stated.
They found that Klein was able to bypass key internal controls for over 20 months without detection. The fictitious trades ultimately cost the bank an estimated $57.8 million to unwind.
“MBL’s ineffective systems and controls meant that one of its employees could, at least for a time, hide trading losses which cost the firm millions to unwind,” said Steve Smart, joint executive director of enforcement and market oversight at the FCA.
He added that this “should serve as an example to those we regulate; risk can come from within. You need the right systems to identify it so it can be tackled early.”
The FCA has also banned Klein from working in the financial services industry for acting dishonestly and without integrity.
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