UK – Financial regulator fines broker over alleged coffee manipulation

MILAN – Andrew Charles Kerr, a commodity broker for Sucden Limited, was banned and fined by the UK financial regulator for manipulating the coffee futures market.
 
The Financial Services Authority\’s (Fsa) decision to fine the London coffee broker £100,000 ($146,400) and ban him from working in the financial services industry marks a significant toughening in the market abuse regime for commodities.
 
On Aug. 15, 2007, Kerr deliberately manipulated the market in London International Financial Futures and Options Exchange traded coffee futures and the related coffee futures options, the Fsa said.
 
Implementing a plan previously developed with his client, Kerr executed trades during a key one-minute period of trading in order to increase artificially the price of coffee futures, the results of which were intended to benefit his client, the Fsa said.
Although Kerr was successful in his attempt to manipulate the market, his client did not make the intended profit, the regulator added. Kerr agreed to settle and the firms involved were not criticized for their supervision or internal procedures.
 
“Kerr breached the standards expected of approved persons and has paid the price,” Alexander Justham, the Fsa’s director of markets, said a statement.