C3: Enforcement in civil & criminal courts

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Civil action

Ask High Court to grant injunctions:

prevent person from conducting regulated activities without authorisation

prevent person from making misleading statements in breach of FSMA

stop unlawful financial promotions

prevent person from committing market abuse

Order payment of restitution:

Court can order person to repay any profits to compensate victims for any loss

asset-freezing order can prevent disposing of assets before restitution is made

Insolvency orders:

winding-up or administration order against firms for 'breaching general prohibition'

bankruptcy order against individuals

Criminal proceedings

'Summary only' offences dealt with by magistrates' courts.

'Indictable' can be heard in Crown with jury deciding verdict.

Some punishable by fine only; others 7 years max imprisonment.

Offences cover range of misconduct:

falsely claiming to be FCA-authorised

carrying on regulated activity without authorisation

making misleading statements to induce investments

failing to co-operate with FCA investigations

Market Abuse

FSMA s118 creates civil penalites for market abuse to run parallel with criminal offences

Offences are making a misleading statement & engaging in a misleading course of conduct for purpose of inducing another person to exercise or refrain from exercising rights in relation to investments.

Part V of Criminal Justice Act 1993 sets out criminal offences of insider dealing.

Civil offence, as defined can be:

Insider Dealing

Improper Disclosure

Misuse of Information

Manipulating Transactions

Manipulating Devices

Dissemination - knowingly conveying false info about an investment

Distortion & Misleading Behaviour

Max 7 years in prison or unlimited fine.

FCA will pursue cases where there is sufficient evidence to convict and is in public interest to do so.

Money Laundering

FCA are able to:

levy penalties

prosecute

for breaches of 3MLD. 2 imprisonment, fine, or both.

Formal statutory offences:

acquisition, possession, use, concealment, disguise, conversion, transfer, or removal of criminal property or assisting is offence under Proceeds of Crime Act 2002 (POCA) - 14 years imprisonment and unlimited fine

failure to report any knowledge or suspicion punishable up to 5 years imprison and/or fine

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