The Financial Conduct Authority (FCA) has fined trader Nailesh Teraiya £5.95 million and barred him from operating in the market for his role in a sham trading scheme that obtained fake refunds of €91.2 million from the Danish tax authority, SKAT.
The regulator found that Teraiya’s firm Indigo Global Partners Limited received £326,000 and Teraiya received more than £5.1 million through third parties in return for his part in the scheme.
The claims to SKAT were made using false and misleading documents produced by Indigo.
These documents falsely certified that clients of Indigo owned large numbers of shares, for which dividends had been paid, and the tax had been withheld on these dividends on behalf of the Danish tax authorities.
The FCA has found that Teraiya knew that the documents were false and misleading and that they were used to support “reclaims” of tax that had never actually been paid.
Therese Chambers, joint Executive Director of Enforcement and Market Oversight at the FCA, said that Teraiya acted dishonestly and personally benefitted to the tune of over £5 million. “There is no place for such conduct in UK markets,” she added.
The FCA arrived at the fine amount to deprive Teraiya of the financial benefit he had received from this scheme.
This is the sixth case brought by the FCA concerning cum-ex trading, with fines now totalling nearly £22.5 million.
