Ex Credit Suisse adviser fined £662k for gilt manipulation

The Financial Conduct Authority has banned a former Credit Suisse investment adviser and issued a fine of £662,700 for manipulating the price of a government bond.

On 10 October 2011, bond trader Mark Stevenson tried to sell his holding in the gilt to the Bank of England for an artificially high price as part of the BoE’s quantitative easing programme.

Mr Stevenson had gradually increased his holding in that particular bond in anticipation of another round of QE.

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This follows the Bank of England’s 6 October announcement that it would reintroduce the QE programme.

On 10 October Mr Stevenson increased his holding of the gilt in trades accounting for 92 per cent of its turnover that day, and with the intent of driving up the price.

As a result the bond significantly outperformed its peers on that day.

If the Bank had accepted Mr Stevenson’s offer - which it refused after unusual trading was reported - he would have accounted for 70 per cent of the £1.7bn allocated to QE on that day.

The regulator described Mr Stevenson’s behaviour as “especially egregious”, stating in a statement that it “fell far below the standards of integrity expected of FCA approved persons”.

Tracey McDermott, director of enforcement at the FCA, said: “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. He has paid a heavy price for his actions.”