Upper Tribunal

Upper Tribunal Upholds FSA Swift Trade Market Abuse Fine

On January 28, the FSA published a press release regarding the decision of the Upper Tribunal (Tax and Chancery Chamber) to uphold the FSA’s decision to fine Swift Trade Inc £8 million for market abuse, marking the largest fine ever issued against a firm for market manipulation.

The FSA first published its decision notice in August 2011, having identified that Swift Trade had engaged in market abuse prior to its dissolution under Canadian law in December 2010.  In response, Swift Trade referred the matter to the tribunal, and Peter Beck, the President and CEO, made an additional reference on the basis that he had been prejudicially identified in the decision notice.  However, the tribunal concluded that the FSA had provided sufficient proof that Swift Trade had engaged in deliberate, manipulative and deceptive layering activities which together constituted market abuse.  The tribunal also dismissed Mr Beck’s reference.

FSA Bans Introducer Appointed Representative Following Upper Tribunal’s Decision

On 22 May 2012, the FSA published a final notice issued to appointed representative Derek William Wright. The notice prohibits Mr. Wright from performing any function in relation to any regulated activity on honesty, integrity and competence grounds.  Mr. Wright was the controller of Moorgate Insurance Agencies Ltd, a small insurance broker. Mr. Wright had acted dishonestly, with a lack of integrity and was found to have a reckless attitude to compliance with regulation. He had been disciplined by the Lloyd’s Disciplinary Tribunal for conducting insurance business in a discreditable manner. He had also performed controlled functions without approval, submitted inaccurate and misleading capital information to the FSA and failed to co-operate with the FSA.

Mr. Wright had referred the FSA’s original decision notice to the Upper Tribunal (Tax and Chancery Chamber). The Tribunal had dismissed the reference and directed the FSA to issue a prohibition notice against Mr. Wright. Final Notice.

Upper Tribunal Upholds FSA Decision to Ban and Fine Former UBS Advisers

The Upper Tribunal (Tax and Chancery Chamber) has upheld an FSA decision to ban and fine two former UBS advisers in relation to an unauthorised trading scheme.  The FSA were directed to fine Sachin Karpe £1.25 million and Laila Karan £75,000 and ban them for performing any role in regulated financial services for failing to act with integrity, in breach of Principle 1 of the FSA’s Statements of Principles and Code of Conduct for Approved Persons and for not being fit and proper persons as they lacked honesty and integrity.

Mr. Karpe was Desk Head of the Asia II Desk at UBS AG’s international wealth management business in London. He had carried out substantial authorised trading and made unauthorised transfers and loans between client accounts to conceal the losses. Mr. Karpe was Ms. Karan’s line manager. She assisted him in concealing the unauthorised activity and prepared false attendance notes. UBS paid compensation of over US $42 million to 21 customers who has suffered substantial losses as a result of the scheme.  Decision for Mr. Karpe.  Decision for Ms Karan.