The UK’s Financial Conduct Authority (FCA) has closed its investigation into the infamous “cum-ex” dividend tax fraud, issuing its final fine stemming from the case to trading firm Mako Financial Markets, according to a report by Reuters.
Mako’s £1.66m ($2.1m) fine marks the eighth penalty in the UK’s probe, bringing total FCA fines in the case to more than £30m across seven firms and one individual. According to the FCA, the firm executed billions of pounds in questionable transactions for clients of convicted hedge fund founder Sanjay Shah’s Solo Group between 2013 and 2015.
The FCA found that Mako failed to recognise red flags in trades linked to Solo Group involving high volumes of stock and missing ownership records, a hallmark of financial crime.
Mako CEO Trystan Morgan Schauer acknowledged the fine but emphasised that the business in question had been shut down nearly a decade ago. He added that Mako has since strengthened its governance and compliance measures to prevent similar issues.
By settling the FCA’s findings without dispute, Mako received a 30% reduction in its penalty, which would have otherwise been £1.89m.
Shah is currently appealing a 12-year prison sentence in Denmark for his role in the fraud. He also faces a £1.44bn civil lawsuit in London from Denmark’s tax authority, SKAT.
