Financial Services Authority v Fradley & Woodward

Financial Services Authority v Fradley & Woodward

The Court held that whether 147 and TBPS together operated a single set of arrangements constituting a CIS could not be determined without a full trial of the facts, and Mr Fradley had a real prospect of success on this issue. However, if the scheme was a joint CIS, participants did not have day-to-day control in the relevant periods, and the scheme was operated in the UK for FSMA purposes even after Mr Fradley moved to Ireland. Section 21 was contravened if the scheme was a CIS.

Parties
Appellant/respondent: Financial Services Authority; Respondents/appellant: Fradley & Woodward
Jurisdiction
England and Wales
Judgment Date
23 November 2005
Procedural Posture
Civil Appeal / Appeal From High Court (chancery Division) on Summary Judgment
Outcome
Mr Fradley's appeal allowed; FSA's appeal dismissed to the indicated extent; costs and final orders to be determined after written submissions.
Legal Topics
Collective Investment Schemes, Authorisation of Investment Business, Financial Promotion, Jurisdiction Under FSMA
Financial Services Law Regulatory Law Collective Investment Schemes Authorisation of Investment Business Financial Promotion Jurisdiction Under FSMA

Case Brief

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Parties

Financial Services Authority

Appellant/respondent

Fradley & Woodward

Respondents/appellant

Procedural Posture

Civil Appeal / Appeal From High Court (chancery Division) on Summary Judgment

Legal Issues

  1. 1 Whether the tipping and bet placement services constituted a collective investment scheme (CIS) under section 235 of FSMA
  2. 2 Whether participants had day-to-day control over their contributions for the purposes of section 235(2) FSMA
  3. 3 Whether the scheme was operated in the United Kingdom for the purposes of FSMA after Mr Fradley moved to Ireland

Ratio Decidendi

The Court held that whether 147 and TBPS together operated a single set of arrangements constituting a CIS could not be determined without a full trial of the facts, and Mr Fradley had a real prospect of success on this issue. However, if the scheme was a joint CIS, participants did not have day-to-day control in the relevant periods, and the scheme was operated in the UK for FSMA purposes even after Mr Fradley moved to Ireland. Section 21 was contravened if the scheme was a CIS.

Court Disposition

Mr Fradley's appeal allowed; FSA's appeal dismissed to the indicated extent; costs and final orders to be determined after written submissions.

Orders

  • Mr Fradley permitted to take to trial the issue whether 147 and TBPS together operated a single set of arrangements constituting a CIS.
  • Parties to lodge written submissions on costs.