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Huge fine for share trader.

Byline: Ben Griffiths

THE London share trading arm of Dutch bank ABN Amro was yesterday fined pounds 900,000 by City watchdogs for ``market misconduct and serious compliance failures''.

The fine meted out by the Financial Services Authority (FSA) is one of the largest ever for a City institution.

In a statement, the regulator saidABN Amro traders had accepted improper instructions which were designed to force up the closing share prices of certain companies.

This happened on three separate occasions between April and October 1998 and involved several different ABN Amro traders.

The companies whose shares were involved were Carlton Communications, British Biotech, Volkswagen and Metro.

Trading in stocks simply to move the market price is a serious abuse as it distorts market forces and undermines investors' confidence in the integrity of prices quoted on exchanges.

FSA managing director Carol Sergeant said: ``These were not isolated events. The repeated nature of the breaches demonstrates the absence of a robust compliance environment on the firm's trading floor.''

ABN Amro traders were acting on the instructions of a sales trader at the bank's US unit, acting on behalf of the sameUSclient.

An additional fine of pounds 70,000 was imposed on Michael Ackers, then joint head of the bank's UK equity trading desk.

The FSA said ABN Amro had admitted serious compliance failures and had since taken action to improve its policies and procedures.

Previous fines from the FSAhave included a pounds 4m penalty on investment bank Credit Suisse First Boston International in December. More recently Lincoln Financial Group was hit with a pounds 485,000 fine for mis-selling. The FSA views with particular seriousness misconduct that occurs when firms fail to invest adequately in compliance procedures, policies and training. ``Investors need to be confident that they a redealing in clean and orderly markets,'' theFSA said in a statement.

A spokesman for ABN Amro said: ``We cooperated fully with the FSA inquiry and they have acknowledged it in their findings. We have conducted a comprehensive internal inquiry and as a result we have improved our training, internal controls and monitoring systems. The FSA has acknowledged these improvements.''
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Title Annotation:Business
Publication:Daily Post (Liverpool, England)
Date:Apr 24, 2003
Words:355
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