FX comment: Was regulator pressured to act on Saxo by press reports?
Since when did financial authorities spring into action on the back of media speculation?
Further to an investigation into Saxo’s anti-money laundering protocols, Finanstilsynet (Danish FSA) launched an investigation into Saxo Bank and its platform SaxoTrader in 2009 and 2010, from which they have published a series of reports during July 5 to 7 2010.
The report from the second Danish FSA investigation accuses Saxo of failing to protect investor interests adequately.
Strangely, in the introduction letter to the report, dated July 5 2010, the Danish FSA writes (translated from Danish): “Since the press has raised uncertainty with regards to the bank’s integrity and loyal execution of customers orders, and since Finanstilsynet has received a complaint that the bank has conducted front-running or in other ways, not executed customers orders in line with the bank’s own trading procedures or Best Execution Policy, the Finanstilsynet finds that there is a need to investigate the bank’s handling and execution of orders.”
The Danish press, particularly newspapers Børsen and EPN have been fiercely reporting on Saxo Bank, documenting allegations and rumours from customers and former employees. As a consequence of the latest run in with the Danish FSA, Saxo Bank’s directors have now refused to speak to the Danish press and communication is through press releases only.