Trader fined £660,000 for rigging UK bond market

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Regulators have fined a trader more than £660,000 for deliberately manipulating the UK bond market.

Mark Stevenson has also been banned from all city trading for life.

He tried, unsuccessfully, to sell a £1.2bn holding to the Bank of England at an artificially high price during its quantitative easing purchases (QE) on 10 October 2011.

The Financial Conduct Authority (FCA) said the former Credit Suisse trader's conduct was "particularly egregious".

"Stevenson's abuse took advantage of a policy designed to boost the economy with no regard for the potential consequences for other market participants and, ultimately, for UK tax payers," said Tracey McDermott, the FCA's director of enforcement.

Unusual trading

By increasing his holding in the relevant gilt on the day the Bank was due to purchase more government bonds, the experienced trader knew he would artificially increase its price, the FCA said.

The unusual trading was reported within 40 minutes and the Bank decided not to buy that gilt as part of QE.

Had Mr Stevenson's offer to trade with the Bank been accepted, he would have accounted for 70% of the £1.7bn spent by the Bank of England buying UK bonds on that day.

If the Bank had suffered any subsequent losses on the trade, the FCA said, they would have been covered by the government, at taxpayers' expense.

First penalty

Credit Suisse removed Mr Stevenson from trading in October 2012, and he left the company in December last year.

In a statement, Credit Suisse said: "We agree with the FCA's decision to sanction Mr Stevenson and are pleased to note that neither Credit Suisse nor any other employed individuals have been found at fault."

The FCA said Thursday's fine of £662,700 was the first penalty for attempted or actual manipulation of the gilt market.

Mr Stevenson, a bond trader with almost 30 years' experience, agreed to settle at an early stage of the investigation, qualifying for a 30% discount, the FCA added.

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