Merrill Lynch’s Irish division has been fined €2,75 million by the Financial Regulator over two incidents in which traders failed to appropriately value their positions.
In a statement issued today, the Financial Regulator said it had entered into a settlement agreement with the company over the incidents which occurred in the London branch of Merrill Lynch International.
The first incident occurred between December 2008 and February 2009, resulting in losses to Merrill Lynch International Bank of $456million while the second took place between May and August of this year, resulting in losses of $5.3 million.
The Regulator said that as details of the second incident were disclosed during an investigation into the first breach, it had been decided to deal with the cases together.
“Breaches of regulatory requirements common to both incidents were a failure to have in place a well defined and transparent line of supervisory responsibility; a failure to supervise the trader’s activity and an inadequate month-end independent price verification process. Additionally, in the first incident it was also found that there was a failure to manage effectively market risk limits in respect of the trader’s activities,” the regulator said.
Merrill Lynch said that it had taken complete remedial action to fully rectify the breaches identified by the regulator
