Financial Services Authority v Martin & Anor

Financial Services Authority v Martin & Anor

Section 380(2) FSMA, as applied by the transitional provisions, authorises the court to make remedial payment orders against persons knowingly concerned in a contravention of s.3 FSA 1986, even if they did not themselves enter into a transaction, provided the contravener did. The payment orders made were steps to remedy or mitigate the contravention. Regulation 2(4) does not preclude such orders against persons knowingly concerned.

Parties
Claimant/respondent: The Financial Services Authority; 1st Defendant/appellant: John Martin; 2nd Defendant/appellant: Adrian Sam & Co.
Jurisdiction
England and Wales
Judgment Date
25 November 2005
Procedural Posture
Civil Appeal / Appeal From Summary Judgment and Final Orders
Outcome
Appeal dismissed
Legal Topics
Remedial Orders Under FSMA, Liability for Knowing Involvement in Contravention, Transitional Provisions Between FSA 1986 and FSMA 2000
Financial Services Law Partnership Law Remedial Orders Under FSMA Liability for Knowing Involvement in Contravention Transitional Provisions Between FSA 1986 and FSMA 2000

Case Brief

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Parties

The Financial Services Authority

Claimant/respondent

John Martin

1st Defendant/appellant

Adrian Sam & Co.

2nd Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From Summary Judgment and Final Orders

Legal Issues

  1. 1 Whether s.380(2) FSMA authorises restitutionary orders against persons knowingly concerned in contraventions of s.3 FSA 1986
  2. 2 Whether the payment orders made were steps to remedy the contravention
  3. 3 Whether Regulation 2(4) of the Transitional Provisions Order precludes orders against persons knowingly concerned who did not themselves enter into a transaction

Ratio Decidendi

Section 380(2) FSMA, as applied by the transitional provisions, authorises the court to make remedial payment orders against persons knowingly concerned in a contravention of s.3 FSA 1986, even if they did not themselves enter into a transaction, provided the contravener did. The payment orders made were steps to remedy or mitigate the contravention. Regulation 2(4) does not preclude such orders against persons knowingly concerned.

Court Disposition

Appeal dismissed

Orders

  • Declaration that Mr Martin and the Firm were knowingly concerned in the contravention of s.3 FSA 1986 by Mr Wilkinson
  • Order that Mr Martin and the Firm pay £101,391 for distribution to investors who did not receive shares