Goodbody Stockbrokers has been fined a total of €1.225m by the Central Bank for breaching its obligations under the Market Abuse Regulations (MAR) for more than five years.
A Central Bank investigation found that Goodbody failed to put in place an effective trade surveillance framework to monitor, detect and report suspicious orders and transactions in relation to market abuse in the period from July 2016 to January 2022.
Goodbody, which is owned by AIB, has admitted the breach. It was bought by the bank in 2021.
Today marks the first time that Goodbody's, the country's oldest stockbroker, has been sanctioned by the Central Bank.
The failings that gave rise to the probe into the company were first identified by the Central Bank during the course of its supervisory Market Abuse Thematic Review in 2020.
The Central Bank had determined the appropriate fine for the stockbrokers to be €1,750,000, but reduced it by 30% to €1.225m by way of a settlement discount.
MAR is the European Union's legal framework that aims to protect and preserve market integrity.
In a statement today, the Central Bank said that market abuse - including insider dealing, market manipulation or attempted insider dealing or market manipulation - harms the integrity of financial markets and prevents full and proper market transparency, which is a prerequisite for trading for all actors in integrated financial markets.
Seána Cunningham, the Central Bank's Director of Enforcement and Anti-Money Laundering, said today's outcome stresses the importance of effective arrangements, systems and procedures within firms that professionally arrange or execute transactions.
"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," Ms Cunningham said.
She explained that MAR requires firms to take proactive steps to implement and maintain appropriate systems and frameworks to detect and report market abuse.
"The Central Bank has repeatedly highlighted the importance of compliance with MAR since it came into force, through supervisory engagements, "Dear CEO letters" and Securities Markets Risk Outlook Reports," she stated.
Ms Cunningham said the Central Bank expects the board and senior management of regulated entities to take full ownership of the governance of market conduct risk.
"This case serves to highlight the importance the Central Bank places on firms' abilities to monitor, detect and report suspected market abuse, a critical part of protecting the integrity of financial markets," she added.
Today marks the Central Bank's 156th enforcement outcome to date, bringing the total fines imposed by it to over €405.9m.
