Coffee trader banned for life
Andrew Kerr, a commodity broker with Sucden, has today been fined £100,000 by the Financial Services Authority (FSA) after he admitted trying to rig the coffee futures market with a client. While the "sting" was successful and the price of coffee was pushed artificially higher it is believed that the broker and his client didn't actually make any financial gain from related transactions. However, he admitted to the charge when challenged by the authorities which led to today's ruling.
Originally the fine had been £125,000 but this was reduced due to his guilty plea at a very early stage, thereby saving the authorities months and months of investigating the background to the scam. Market abuse has become more common practice over the last few months with volatile markets and difficult trading conditions forcing a number of people to look elsewhere for new opportunities. It is unclear at the moment exactly how the pair managed to artificially increase the trading price of coffee but the use of futures has for sometime been a concern for many within the marketplace.
The FSA has been very strict over the last couple of years with regards to market abuse cases and successful convictions appear to be arriving on regular basis now. It would seem that better investigative strategies, a better funded operation and an increase in the data now available to the FSA may be behind the improvement in conviction rates.
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