The UK financial watchdog has penalised Mothahir Miah for engaging in an abusive practice known as “cherry picking”.
The UK's Financial Conduct Authority has fined Mothahir Miah, a former investment analyst at Aviva Investors, £139,000 ($212,000) and banned him from the financial services industry.
Between January 2010 and October 2012, Miah exploited weaknesses in the trading systems and controls at Aviva Investors in order to delay the booking and allocation of trades. This meant he could assess the performance of a trade during the day and allocate trades which had benefitted from favourable price movements to hedge funds that paid performance fees and trades that had not benefitted to certain long-only funds that paid lower or no performance fees. This abusive practice, the FCA said, is known as “cherry picking”.
The regulator added that Miah was motivated by a desire to prove his trading ability and increase his chances of being promoted because the culture within the fixed income business was heavily focused on performance.
The FCA fined Aviva Investors £17.6 million for its failings, which included those of Miah, in February this year. Miah’s remorse and early admissions of his actions, mean that his ban may be revoked after five years upon his application.
“Mr Miah abused the trust given to him by his clients in a very clear and deliberate way. It is vital that approved persons operate with honesty and integrity at all times. Mr Miah did not,” said Mark Steward, the FCA's director of enforcement, in a statement.
“We have taken into account that Mr Miah admitted his misconduct at a very early stage to both Aviva Investors and the FCA and showed remorse for his actions.”