Six Found Guilty of Insider Dealing
On July 23, the FSA published a press release announcing that six people have been convicted of offences of disclosure of inside information and dealing whilst in possession of confidential and price sensitive information in respect of six companies' stocks. A seventh defendant, was acquitted of insider dealing. Press Release.
Between May 2006 and May 2008, the defendants obtained confidential and price-sensitive information from investment banks concerning proposed or forthcoming takeover bids. They then used this information to place spread bets ahead of those announcements knowing that when the information became public knowledge the price would rise. The defendants made a combined profit of £732,044.59. This was the longest and most complex prosecution brought by the FSA to date. On July 27, the six defendants were sentenced to jail for a total of 16 years.
New Temporary Short Selling Bans Introduced by Spain, Italy and Greece
On July 23, Spain, Italy and Greece introduced new temporary bans in relation to short selling in response to the recent extreme volatility in the European financial markets.
The Comisiòn Nacional del Mercado de Valores ("CNMV") has decided to ban short selling on Spanish regulated markets with immediate effect. The ban will apply for three months until October 23, although CNMV may choose to extend it for a further period.
The Commissione Nazionale per le Società e la Borsa ("CONSOB") announced a ban on short selling in respect of shares of certain companies in the Italian banking and insurance sectors that will last from July 23 to July 27.
In addition, on July 24, Greece’s Hellenic Capital Market Commission ("HCMC") announced an extension to the current short selling prohibition on the Athens Stock Exchange for an additional three months until October 31. Press Release.
For further details, please see updated version of the European Securities and Markets Authority ("ESMA")’s table of members' short selling measures. Updated Version.
FSA Fines and Bans Insurance Broker for Misappropriating Insurance Premia
On July 24, the FSA published the final notice issued to Stephen Goodwin, a commercial insurance broker at S Goodwin & M Best, which has now ceased trading. Final Notice.
The FSA found that between November 2008 and November 2010, when the firm was in financial difficulties, Mr. Goodwin and his partner (now deceased) retained a number of insurance premia from clients which they did not pay to insurers and intermediaries. Three clients suffered financial loss as a result of this. One client discovered they were not insured, and two clients paid the same premium twice to ensure their policies remained in force.
Mr. Goodwin was fined £471,846 for falling short of the required standards for approved persons in respect of honesty and integrity. This was made up of a disgorgement payment of £303,846 and a punitive payment of £168,000. This is one of the largest fines levied on an individual for insurance fraud, and sends out a clear message regarding the FSA's credible deterrence policy. Mr. Goodwin was also banned from performing any function relating to a regulated activity carried on by an authorised or exempt person or exempt professional firm.
ESMA Announces Open Hearing on AIFMD
On July 23, ESMA announced that an open hearing will take place on the draft Guidelines on sound remuneration policies under the Alternative Investment Fund Managers Directive ("AIFMD"). The draft Guidelines form the consultation process and were published on June 28. The hearing will cover the scope of the proposed Guidelines. Agenda.
The hearing will take place at ESMA's offices in Paris on September 25 and is open to all members of the public.