Financial services and markets tribunal clarifies both its own jurisdiction and the scope of market abuse
| Pages | 116-121 |
| DOI | https://doi.org/10.1108/13581980710727056 |
| Published date | 27 February 2007 |
| Date | 27 February 2007 |
| Author | Joanna Gray |
| Subject Matter | Accounting & finance |
LEGAL AND REGULATORY COMMENTARY
Financial services and markets
tribunal clarifies both its own
jurisdiction and the scope of
market abuse
Joanna Gray
University of Newcastle upon Tyne, Newcastle upon Tyne, UK
Abstract
Purpose – To report and comment on the tribunal case Phillippe Jabre v. FSA
Design/methodology/approach – Outlines the facts and explains the decision reached.
Findings – Had the tribunal resolved the market abuse issue otherwise it would have flown in the
face of the realities of globally integrated financial markets and trading activity.
Originality/value – The case sounds a reminder of the width of the rationale for legislating against
market abuse and insider trading.
Keywords Tribunals, Insidertrading
Paper type Viewpoint
Phillipe Jabre v. FSA (Financial Services and Markets Tribunal: Stephen Oliver QC,
Ian Abrams, Sandi O’Neill: FIN 2006/0006)
Facts
Mr Jabre was the applicant before the Financial Services and Markets Tribunal in a
reference which gave rise to both of these preliminary rulings from the tribunal. At the
time when the circumstances giving rise to the reference occurred he was an
experienced senior trader with a hedge fund manager, GLG Partners LP. His areas of
particular expertise were the Japanese markets and convertible arbitrage strategies.
Because of the nature of his work for his employers he needed approval (which he had)
from the FSA under section 59 FSMA 2000 to perform the following “controlled
functions” on their behalf: Director, Investment Adviser, Customer Trading and
Investment Manager. He was thus an approved person under the bespoke regulatory
regime contained in Part V FSMA 2000 and so was under an obligation to comply with
the FSA’s Statements of Principles for Approved Persons which contain the core
responsibilities for such individuals. On 11 February 2003 Mr Rustum, a salesman at
Goldman Sachs telephoned Mr Jabre about a forthcoming issue of securities by
Sumitomo Mitsui Financial Group Inc. (SMFG) and placed a restriction on the
telephone call or “wall-crossed” it in the language of the markets. Mr Jabre answered
that he “understood that unless the restriction was lifted, or an issue was announced,
he would not be able to make any trades based on any confidential information given
to him during the call”. Mr Rustum then relayed certain information about the
proposed issue. In dispute in this reference were the significance of that information as
The current issue and full text archive of this journal is available at
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JFRC
15,1
116
Journal of Financial Regulation and
Compliance
Vol. 15 No. 1, 2007
pp. 116-121
qEmerald Group Publishing Limited
1358-1988
DOI 10.1108/13581980710727056
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