The Financial Services Authority (FSA) has found Fabio Massimo De Biase, a former cash equities broker at TFS Derivatives Ltd., to have acted without integrity in his dealings with Anjam Ahmad, a hedge fund trader at AKO Capital LLP.
TFS used to pay De Biase a portion of the commission revenue he generated from winning brokerage contract. He then conspired with Ahmad to give him brokerage business, and he, in turn, gave the latter a large kickback in the amount of ₤131,000 from his burgeoning commissions. In 20 occasions between the years 2008 and 2009, FSA found De Biase and Ahmad to have agreed that a higher level of commission would be charged to AKO using enhanced commissions (called “declined improvements.”)This kind of commission is supposed to reward exceptionally good performance on the part of the broker but it was used by De Biase and Ahmad to increase the amount of money available to them to split.
De Biase was able to receive ₤198,000 from his fraudulent scheme with Ahmad. FSA ordered him to disgorge this sum as well as imposed against him additional penalty. He subsequently paid Ahmad ₤131,000, which amount became a subject of an FSA Final Notice.
In imposing the ban and fine against De Biase, Margaret Cole, managing director of FSA’s Enforcement and Financial Crime, said that they are significant penalties and should serve as a reminder that fraudulent dealings like De Biase transactions have no place in the financial services industry and will not be tolerated.