FCA fines and bans former senior executives of Martin Brokers for compliance failings in relation to LIBOR

The FCA has banned and fined two former senior executives of Martin Brokers (Martins) a total of £315,000 for compliance and cultural failings which facilitated the firm’s misconduct in respect of the London Interbank Offered Rate (LIBOR).

David Caplin, Martins’ former chief executive, was fined £630,000 in 2014 for attempted manipulation of LIBOR
Jeremy Kraft, Martins’ former compliance officer, was fined Mr Kraft £105,000 and banned him from holding a significant influence function at an FCA authorised firm

The FCA found that

David Caplin, Martins’ former chief executive, breached Statement of Principle 7 by failing to take reasonable steps to ensure compliance with the regulatory regime.
1. In particular, Mr Caplin failed to
  1. ensure effective oversight of the firm’s compliance function,
  2. monitor broker conduct and
  3. Address’ lack of controls to prevent brokers making or receiving corrupt inducements.
  4. Implement the recommendations of an external compliance consultancy firm properly which identified compliance deficiencies at the firm.
2. As a result of these failings, the FCA has fined Mr Caplin £210,000 and banned him from holding a significant influence function at an FCA authorised firm.
Jeremy Kraft, Martins’ former compliance officer, breached
1. Principle 6 for failing to act with due skill, care and diligence in overseeing the compliance division.
2. Principle 7 by failing to take reasonable steps to ensure compliance with the regulatory regime.
3. In particular, Mr Kraft
  1. Failed to carry out his responsibilities in respect of compliance matters diligently;
  2. failed to challenge David Caplin on compliance issues;
  3. delegated matters to unqualified members of staff; and
  4. Failed to follow the advice of an external compliance consultancy firm to address shortcomings in Martins’ compliance.
4. As a consequence, the FCA has fined Mr Kraft £105,000 and banned him from holding a significant influence function at an FCA authorised firm.