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Tribunal backs FCA ban for trader who lied to regulator

The Upper Tribunal has directed the FCA to ban a former derivatives trader from performing any role in regulated financial services.

David John Hobbs was found to have lacked integrity for lying to the FCA during its investigation, and maintaining the same false defence in front of a tribunal.

The FCA sought to ban and fine Hobbs £175,000 for market abuse in a decision notice published in July 2010.

The action centred on Hobbs instructing Andrew Charles Kerr, a broker at Sucden, to buy 600 lots of September 2007 coffee futures on the Euronext Life exchange in August 2007.

Hobbs appealed the decision, and in November 2012 a tribunal found that although he had lied to it and the FCA, he had not committed market abuse.

The FCA appealed the Tribunal’s finding regarding Hobbs’ fitness and propriety, but not its finding on market abuse, to the Court of Appeal. 

In July 2013 the Court of Appeal held it was incumbent upon the Tribunal to address the question whether, even if Hobbs was not guilty of market abuse, his lying demonstrated that he was not a fit and proper person. 

Accordingly, the Court remitted the matter of fitness and propriety to the Tribunal which heard the matter on 26 November. 

The Tribunal found that, in putting forward a false defence to the FCA during the course of its investigation, and in maintaining that defence in evidence before the Tribunal, he had exhibited a lack of integrity and is therefore not a fit and proper person. 

FCA director of enforcement and financial crime Tracey McDermott says: “Hobbs misled the FCA during its investigation. He misled the RDC. He misled the Tribunal. 

“Accordingly, he failed to demonstrate the standards of behaviour that we expect of those who hold the privileged position of approved person and failed in his basic responsibility to act with integrity. If you cannot tell the truth there is no place for you in the financial services industry.”


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

  1. So, the FCA persued a lost cause for seven years as a matter of pride at huge expense just to get a trader prohibited. The fact that he was found NOT guilty of market abuse, conceded by the FCA themselves, they still hounded him all the way to the appeals court and back just to get him prohibited. And for what? Lying? He was cleared so how could he have been lying? It is their opinion that he lied not fact and stinks of a witch hunt to justify the huge waste of money over the seven years. Shame on them.

  2. What is good for the goose……. we need to operate the same system in reverse for F-pack staff who lie or abuse their position. We record all client and F-oack phone calls so that we can insist on the F pack doing the same. They are NOT immune despite thinking they are, Crown immunity went out about 2 decades ago.

  3. P.S is this a lifetime ban? If so I take it the F pack do not subscribe to the Uk legal system where there is a mixture of punishment and correction.

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