FIN-FSA imposes a penalty payment of EUR 1,650,000 on S-Bank Plc for omissions in the detection of suspicious transactions
The Financial Supervisory Authority (FIN-FSA) has imposed on S-Bank Plc a penalty payment of EUR 1,650,000. The Bank has between July 2016 and November 2018 failed to comply with the obligations related to the monitoring arrangements of customer trading activities as required by the EU’s Market Abuse Regulation.Under Article 16 of the Market Abuse Regulation, investment service providers shall establish and maintain effective arrangements, systems and procedures aimed at detecting suspicious orders and transactions and for reporting them to the FIN-FSA. The regulation entered into force on 3 July 2016.
The monitoring of trading at S-Bank Plc was based on an entity that comprised internal instructions, monitoring by employees and training. The Bank did not have an automated system for monitoring trading activities.
S-Bank Plc executed in 2016-2018 on average 680,000 transactions annually on the Nasdaq Helsinki Ltd's stock market. In its decision, the FIN-FSA considers that due to the considerable number of the transactions executed by the Bank, the Bank's procedure based on monitoring by its employees, and which moreover had severe shortcomings, did not meet the regulatory requirements.
The FIN-FSA has imposed a penalty payment on S-Bank Plc for the omissions. Determination of the size of the penalty payment is based on a comprehensive assessment, taking into account, among other things, the nature, extent and duration of the omission. In this respect, the FIN-FSA has given particular consideration to the fact that S-Bank Plc has been guilty of at least gross negligence and has also achieved financial gain from the omission, as it has not invested in an automated system for monitoring trading activities. The FIN-FSA has given consideration also to the fact that the Bank's omission has weakened the conditions for the supervision of market abuse conducted by the FIN-FSA, the long duration of the omission and the fact that the FIN-FSA imposed also in December 2019 a penalty payment on the Bank (Press release 18 December 2019).
The penalty payment is payable to the State.
The decision of the FIN-FSA is not yet legally binding. The Bank has the right to appeal against the decision of 13 September 2021 to the Helsinki Administrative Court within 30 days from the time when it was made aware of the decision.
For further information, please contact
Tero Kurenmaa, Head of the Legal Unit Requests for interviews are coordinated by FIN-FSA Communications, tel. +358 9 183 5030, weekdays 9.00–16.00.
Appendix
FIN-FSA's decision (pdf, in Finnish)
Supervision release 16 December 2019: Thematic review on the arrangement of supervision by investment service providers for suspicious transactions and orders