Quick facts
- Fine Amount: £338,000
- Regulator: Financial Conduct Authority (FCA)
- Date of Notice: 24 March 2026
- Violation Period: 1 June 2024 – 6 May 2025
- Primary Issue: Failure to detect and report suspicious CFD trading activity
- Key Regulations Breached: UK Market Abuse Regulation (Article 16(2)), Principle 3, SYSC 6.1.1R
Fine Overview
The Financial Conduct Authority (FCA) has fined Dinosaur Merchant Bank Limited (DMBL) £338,000 for its failures in its market abuse surveillance systems and controls within its contracts for difference (CFD) trading business.
The FCA found that DMBL failed to maintain effective systems and controls to detect and report suspicious orders and transactions without delay, breaching Article 16(2) of UK MAR, alongside Principle 3 and SYSC 6.1.1R.
Details of the Fine
The FCA’s findings focus on weaknesses in DMBL’s automated trading surveillance framework, following the launch of a new order execution platform in June 2024.
According to the Final Notice:
-
DMBL introduced a new order management system in June 2024, which led to a significant increase in CFD trading volumes.
-
The firm failed to ensure that trading through the new system was not properly ingested into automated surveillance tools.
-
As a result, between June and October 2024, automated surveillance did not monitor trading activity executed via the new system.
-
The failings affected 2,194 trades with a total notional value of $3.05 billion.
-
When retrospectively analysed through a new surveillance system, the trades generated:
The FCA concluded that manual monitoring was not sufficient to compensate for the failure of automated surveillance systems. The firm also lacked adequate written policies and procedures for alert review, escalation of suspicious activity, calibration review, and change control.
examples of missed suspicious trading activity
The FCA identified multiple cases where suspicious trading was not escalated or reported via STORs (Suspicious Transaction and Order Reports):
-
In one case, a client profited £433,685 ahead of media speculation on potential bid interest.
-
In another case, two clients made profits of £290,536 and £1,285,178 ahead of acquisition-related news.
-
A further example in early 2025 a client generated £3,359,841 in profit after trading ahead of a potential sale announcement. The FCA found that surveillance calibration deficiencies prevented an expected insider dealing alert from being generated.
governance and surveillance weaknesses were identified by the fca
The FCA also criticised DMBL’s governance and management information:
-
Board reporting did not provide sufficient surveillance information to identify anomalies.
-
Although CFD trading increased by around 45%, surveillance alerts fell by 42% between June and September 2024 compared with the prior four months.
-
Delayed detection of surveillance failures, only identified after the FCA enquiry into the absence of STOR submissions.
As part of remediation, DMBL implemented a market abuse risk assessment, documented STOR procedures, strengthened its compliance team, introduced a new surveillance system in April 2025, and elected to wind down its CFD business entirely from May 2025.
Select Quotes
-
“DMBL failed to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.”
-
“DMBL contravened Article 16(2) of UK MAR because it did not have effective arrangements, systems and procedures to detect and report market abuse which was appropriate, proportionate and effective for the nature, scale and size of its CFD business, and the potential market abuse risks which its CFD business was exposed.”
-
“The breach created a significant risk that financial crime would be facilitated as potential suspicious trading went undetected as a result of the breaches.”
-
“Between 1 June 2024 and 8 October 2024 DMBL failed to ensure trading conducted via its new order system was connected and the activity ingested into its surveillance system.”
source
Financial Conduct Authority, Final Notice to Dinosaur Merchant Bank Limited, dated 24 March 2026.
