Financial Services Authority v Martin & Anor [2005] EWCA Civ 1422 (25 November 2005)

Financial Services Authority v Martin & Anor [2005] EWCA Civ 1422 (25 November 2005)

Section 380(2) FSMA 2000, as applied by the Transitional Provisions Order, authorises the court to make payment orders against persons knowingly concerned in a contravention of s.3 FSA 1986 where the contravention involved entering into a transaction, and such orders may be both corrective and restitutionary in nature. The phrase 'the person concerned' in Regulation 2(4) refers to the contravener, not the person against whom the order is sought. Orders against a firm are proper where a partner was knowingly concerned in the contravention within the scope of partnership business.

Citation
[2005] EWCA Civ 1422
Parties
Claimant/respondent: The Financial Services Authority (A Company Limited By Guarantee); 1st Defendant/appellant: John Martin; 2nd Defendant/appellant: Adrian Sam & Co. (a Firm)
Jurisdiction
England and Wales
Judgment Date
25 November 2005
Procedural Posture
Civil Appeal / Appeal From Summary Judgment/order of Chancery Division
Outcome
Appeal dismissed
Legal Topics
Remedial Orders Under FSMA 2000 S.380(2), Liability of Persons Knowingly Concerned in Contraventions, Transitional Provisions Between FSA 1986 and FSMA 2000, Restitution and Corrective Orders, Partnership Liability for Regulatory Breaches
Financial Services Law Partnership Law Civil Procedure Remedial Orders Under FSMA 2000 S.380(2) Liability of Persons Knowingly Concerned in Contraventions Transitional Provisions Between FSA 1986 and FSMA 2000 Restitution and Corrective Orders Partnership Liability for Regulatory Breaches

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Parties

The Financial Services Authority (A Company Limited By Guarantee)

Claimant/respondent

John Martin

1st Defendant/appellant

Adrian Sam & Co. (a Firm)

2nd Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From Summary Judgment/order of Chancery Division

Legal Issues

  1. 1 Whether s.380(2) FSMA 2000 authorises restitutionary orders or only corrective orders
  2. 2 Whether payment orders against persons knowingly concerned in a contravention of s.3 FSA 1986 are permitted under s.380(2) FSMA 2000 and the Transitional Provisions Order
  3. 3 Whether the court can make orders against a firm where only one partner was knowingly concerned in the contravention

Ratio Decidendi

Section 380(2) FSMA 2000, as applied by the Transitional Provisions Order, authorises the court to make payment orders against persons knowingly concerned in a contravention of s.3 FSA 1986 where the contravention involved entering into a transaction, and such orders may be both corrective and restitutionary in nature. The phrase 'the person concerned' in Regulation 2(4) refers to the contravener, not the person against whom the order is sought. Orders against a firm are proper where a partner was knowingly concerned in the contravention within the scope of partnership business.

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 share certificates (Part A)