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High Court backs FCA in £7.5m market abuse case

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The FCA is entitled to permanent injunctions and penalties totalling £7.57m following a landmark High Court market abuse ruling.

The defendants in the case – Da Vinci Invest Ltd, Mineworld Ltd, Mr Szabolcs Banya, Gyorgy Szabolcs Brad and Tamas Pornye – were found to have broken the regulator’s rules by using a manipulative trading strategy called “layering”.

This involves the entering and trading of orders in relation to shares traded on the electronic trading platform of the London Stock Exchange and “multi-lateral trading facilities” to create a false or misleading impression as to the supply and demand for those shares.

The companies or individuals are then able to trade those shares at an artificial price, the FCA says.

The regulator moved to stop the abuse in July 2011 and Mr Justice Snowden has now ordered the culprits to pay over £7m in fines.

Da Vinci Invest faces a £1.46m penalty; Mineworld £5m; Szabolcs Banya £410,000; Gyorgy Szabolcs Brad £290,000; and Tamas Pornye £410,000.

It is the first time the FCA has asked the High Court to impose a permanent injunction restraining market abuse and a penalty.

Delivering his judgment, Mr Justice Snowden said: “Market abuse can cause serious harm, not only to other market participants and the many millions of private citizens whose personal wealth and provision for retirement is invested on the financial markets, but also to the reputation of those markets more generally.

“Protecting the integrity and proper functioning of those markets is a matter of substantial importance to individuals as well as to national and international economic interests. The policy imperative to prevent and deter market abuse is very clear.”

FCA acting director of enforcement and market oversight Georgina Philippou says: “This case demonstrates that we are prepared to take robust action to ensure the integrity of UK markets. We acted quickly to stop the abusive behaviour in 2011 and today’s judgment means that those behind the abuse will now have to pay significant financial penalties.

“This was a sophisticated form of abuse that took place across multiple trading platforms.  Today’s judgment shows the FCA’s ability and determination to stamp out abusive market practice wherever it may occur in UK markets.

“As the judge states, ‘Protecting the integrity and proper functioning of those markets is a matter of substantial importance to individuals as well as to national and international economic interests’.”



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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Is it me our has any-one else noted the absence of discounts now being reported in these high fine cases ?

    Are they still being offered ?

  2. They only offer a discount if the firm(s) co-operate at an early stage. Presumably this nefarious group didn’t admit any guilt!

  3. Will this verdict impact on the LIBOR cases?.

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