Financial services and markets tribunal orders that costs of successful challenge to enforcement action for market abuse be paid by FSA
| Date | 15 May 2007 |
| Published date | 15 May 2007 |
| Pages | 217-220 |
| DOI | https://doi.org/10.1108/13581980710744101 |
| Author | Joanna Gray |
| Subject Matter | Accounting & finance |
LEGAL AND REGULATORY COMMENTARY
Financial services and markets
tribunal orders that costs of
successful challenge to
enforcement action for market
abuse be paid by FSA
Joanna Gray
University of Newcastle upon Tyne, Newcastle upon Tyne, UK
Abstract
Purpose – To report and comment on the case Paul Davidson, Ashley Tatham v. The Financial
Services Authority.
Design/methodology/approach – Outlines the facts and explains the decision reached.
Findings – The Tribunal ruled that the decision of the Financial Services Authority (FSA) which
was the subject of the references was unreasonable and it directed that the FSA pay the costs or
expenses incurred by the applicants in connection with the proceedings.
Originality/value – With the costs incurred by the applicants being considerable, the paper offers
the following warning: challenges to FSA enforcement action before the Tribunal do not come cheap
and if successful applicants before the Tribunal then face a costs burden too their victories will often
seem somewhat pyrrhic and the incentives for a meaningful level of challenge to FSA enforcement
action, with the attendant public and independent airing of what can be vital legal issues for others too,
becomes weakened.
Keywords Tribunals, Legaldecisions, Litigation
Paper type Viewpoint
Paul Davidson, Ashley Tatham v. The Financial Services Authority (Financial Services
and Markets Tribunal: Dr A N Brice (Chairman), Mr C A Chapman, Mr J Parsloe: FIN
2003/0016 and FIN 2003/0021)
Date of Decision: 7 September 2006
Facts
On 16 May 2006 the Financial Services and Markets Tribunal had ruled in a long
and extensively reasoned decision that, contrary to the Financial Services Authority ’s
(FSA) contentions made in the course of enforcement action under Part VIII FSMA 2000,
Mr Paul Davidson and Mr Ashley Tatham (hereafter referred to as “the applicants”) had
not engaged in market abuse in contravention of Section 118 FSMA 2000. Mr Davidson
was a majority shareholder in Cyprotex Plc a company admitted to the Alternative
Investment Market by way of a placing in its shares in 2002 and Mr Tatham was
an Executive Director of City Index Ltd, a spread-betting firm who operated an account
for Mr Davidson. FSA had alleged that spread-betting activity which took place on
Mr Davidson’s account prior to the placing of Cyprotex shares was part of a scheme of
The current issue and full text archive of this journal is available at
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Financial
services and
tribunal orders
217
Journal of Financial Regulation and
Compliance
Vol. 15 No. 2, 2007
pp. 217-220
qEmerald Group Publishing Limited
1358-1988
DOI 10.1108/13581980710744101
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