The UK’s Market Abuse Regime is continuously evolving through new legislation and case law, with the European Union’s Market Abuse Regulation due to take effect in July 2016. Recent cases show that employees can fall foul of the complexities of the regime, even if they did not set out to act dishonestly; highlighting the need to provide regular and relevant training to staff.

The FCA continues to focus on market integrity via thematic reviews, monitoring and an increasing number of enforcement actions and criminal prosecutions. Hence the reputational risk for firms and the personal risk for staff is high, with penalties including fines, bans and imprisonment.

Complyport consultants include qualified lawyers who can help you navigate through the market abuse regime. We regularly assist with market abuse issues, including:

  • Drafting and implementation of Market Abuse policies and procedures;
  • Market Abuse Training – both via our online training portal (ComplyTrainer) and face-to-face;
  • Advice on responding to FCA market abuse queries;
  • Assistance with conflicts of interest gap analysis;
  • Market Abuse Healthcheck.

Market abuse

As we all know, the FSA been stepping up the pressure on market abuse as part of its ‘credible deterrence’ strategy and will happily take enforcement action against firms and individuals.

Therefore the publication by the FSA of Final Notices in respect of Darren Morton and Christopher Parry, two bond traders at Dresdner Kleinwort, will not have come as a surprise given that both were accused of market abuse following trades made after receipt of inside information.

However what is unusual is that both individuals were only subject to censure and escaped a fine and/or a ban which would now seem par for the course.

Various reasons cited in the Final Notices (which can be accessed via the link below) include the fact that neither had personally profited; didn’t act deliberately etc.

Separate reports suggest that the relatively light punishment is actually due to the two of them contesting the case (it is clear from both Notices that each put up a spirited defence) and the FSA being less sure of its ground that usual rather than the FSA softening its new hard line approach.