GOODBODY STOCKBROKERS HAS been fined €1.2 million for lacking adequate systems to track suspicious transactions between July 2016 to January 2022.
The investigation was the result of a review conducted by the Central Bank in 2020 that looked at the the company’s compliance with Market Abuse Regulations.
The law require firms that professionally arrange or execute transactions to establish and maintain effective “arrangements, systems and procedures to detect and report suspicious orders and transactions”.
The Central Bank’s investigation found that Goodbody didn’t have an effective trade surveillance framework to monitor, and failed to detect and report suspicious orders and transactions over five and a half years.
Goodbody has admitted to the breach.
The Central Bank said it determined the appropriate fine to be €1,750,000, which was reduced by 30% to €1,225,000 through a settlement discount.
Seána Cunningham, the Central Bank’s Director of Enforcement and Anti-Money Laundering, said effective trade surveillance within companies like Goodbody is important as it facilitates the submission of proper Suspicious Transaction Order Reports to the Central Bank, which help stop market abuse.
“This investigation found that Goodbody’s trade surveillance did not operate effectively in respect of risk identification, risk monitoring and governance arrangements, which in turn undermined its ability to detect and report suspected market abuse,” Cunningham said.
“The Central Bank has repeatedly highlighted the importance of compliance with MAR (Market Abuse Regulations) since it came into force, through supervisory engagements, Dear CEO letters and Securities Markets Risk Outlook Reports.”
He added that the Central Banks expects regulated entities like Goodbody to “take full ownership of the governance of market conduct risk”.
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