Mark Stevenson, a bond trader, has been banned and fined £662,700 (after a 30 per cent discount) for engaging in market manipulation.

On 11 October 2011, on the first day of the second round of quantitative easing in the UK, Mr Stevenson, formerly employed by Credit Suisse, bought £331 million of a UK Government gilt.

These purchases represented approximately 2,700 per cent of the average daily volume traded in the previous four months. As a result of Mr Stevenson’s purchase the price and yield of the gilt outperformed all gilts of a similar maturity on the date of purchase. Mr Stevenson subsequently attempted to sell the gilts to the Bank of England (BoE) which was purchasing certain gilts during quantitative easing. The BoE identified the unusual price movements of the gilt and declined all offers to purchase that specific gilt.

The FCA has concluded that Mr Stevenson’s behaviour amounted to market abuse within the meaning of section 118(5) of the Financial Services and Markets Act 2000 because it gave a false or misleading impression as to the price of the gilt and secured the price at an abnormal or artificial level. Mr Stevenson’s actions were regarded as a particularly serious example of market abuse as he sought to profit unreasonably from quantitative easing at the expense of the BoE and the taxpayer at a time of a lack of confidence in the UK financial system.

The FCA considered that Mr Stevenson acted alone and neither his employer nor any colleagues were criticised.

Copies of the final notice http://www.fca.org.uk/static/documents/final-notices/mark-stevenson.pdf
and
press release  http://www.fca.org.uk/news/press-releases/fca-bans-and-fines-trader-660k-for-manipulating-gilt-price-during-qe