Financial services and markets tribunal further clarifies scope of market abuse regime
| Date | 27 February 2007 |
| DOI | https://doi.org/10.1108/13581980710727065 |
| Published date | 27 February 2007 |
| Pages | 122-125 |
| Author | Joanna Gray |
| Subject Matter | Accounting & finance |
LEGAL AND REGULATORY COMMENTARY
Financial services and markets
tribunal further clarifies scope
of market abuse regime
Joanna Gray
University of Newcastle upon Tyne, Newcastle upon Tyne, UK
Abstract
Purpose – To report and comment on the tribunal case James Parker v. FSA.
Design/methodology/approach – Outlines the facts and explains the decision reached.
Findings – An applicant’s failure to abide by an employer’s internal notification rules and clearance
procedures applicable to personal account dealings led the Tribunal to doubt the honesty of that
applicant and the plausibility of his proffered explanation.
Originality/value – The case highlights the factors that may influence a future Tribunal in deciding
whether to reject or accept an applicant’s arguments as to the motivation for and innocence or
otherwise of his behaviour.
Keywords Tribunals, Legaldisputes
Paper type Viewpoint
James Parker v. FSA (Financial Services and Markets Tribunal: Colin Bishopp,
Sandi O’Neill, Nicholas Douch)
Facts
Mr Parker was a chartered accountant who was, at the time when the facts which gave
rise to this reference occurred, employed by Pace Microtechnology plc (“Pace”) as a
credit risk and treasury manager. Pace was listed on the London Stock Exchange.
The Tribunal set out the factual background to this reference in some 28 pages of
considerable detail but summarized them thus:
[Mr Parker] sold holdings of shares in his and his wife’s names, adjusted spread bets he had
previously placed and placed new spread bets in the short interval between his learning on 27
February 2002 that a possible takeover of Pace by a much larger competitor had been
abandoned and that Pace, for other reasons, was very likely to issue a profit warning within
the next few days, and the publication of that warning early on the morning of 5 March 2002.
...the price of Pace shares fell substantially following the publication of the profit warning.
In early 2002 Pace itself was found to be in contravention of the Listing Rules by FSA,
which required timely and accurate announcements to the market. It was fined
£400,000. In 2004 FSA took enforcement action under the market abuse regime in
relation to Mr Parker in respect of his dealing and spread-betting activity in Pace
shares between 27 February 2004 and 4 March 2002. It took the view that his behaviour
amounted to market abuse since the information he received was not generally
available, and he relied upon it to reduce or eliminate losses on Pace shares he would
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1358-1988.htm
JFRC
15,1
122
Journal of Financial Regulation and
Compliance
Vol. 15 No. 1, 2007
pp. 122-125
qEmerald Group Publishing Limited
1358-1988
DOI 10.1108/13581980710727065
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