FSA Bans and Fines Former Managing Director of Welcome Financial Services Ltd for Market Abuse

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The FSA published its final notice dated October 8 in relation to John Blake, the former managing director of Welcome Financial Services Ltd (Welcome). In its final notice the FSA states that Mr. Blake engaged in market abuse, and has fined him £100,000 and banned him from performing any function relating to a regulated activity.

Mr. Blake, together with other directors on the board of Welcome, approved Welcome’s 2007 annual report, which contained false and misleading statements. As Welcome was at the time a subsidiary of the (as was) publically listed Cattles plc (which has since been de-listed), the false and misleading statements in the Welcome report were included in Cattles’ 2007 annual report and rights issue prospectus. The FSA considered that Mr. Blake had been “knowingly concerned” in the failure of Welcome to take reasonable care to organise and control its affairs responsibly and effectively.

The FSA viewed Mr. Blake’s conduct as particularly serious as it took place over a sustained period (approximately 18 months) and had a very serious impact both on Cattles’ shareholders (who lost all or virtually all of their investment) and on market confidence.