30 May 2012
Back in September 2011 we noticed the curious decision of the Serious Fraud Office to drop its investigation into Weavering Capital, the investment advisor to the failed Weavering Macro Income Fund (a Cayman Islands hedge fund). The SFO’s dropping of its investigation was thrown into relief when the Cayman Grand Court found two of the Fund’s directors, Stefan Peterson and Hans Ekstrom, guilty of wilful negligence and awarded damages against them of $111 million in a case brought by the Fund’s liquidators.
Today the High Court in London found Magnus Peterson, the founder of the Fund (and brother of Stefan, stepson of Hans) to have committed fraud and breached his duty of care and so liable for deceit in a civil case brought by the Fund’s liquidators.
read more »
Posted in Financial services and market conduct, Regulators, Risk management |
Comments Off
29 May 2012
The Financial Services Authority announced this morning that it intends to fine Alberto Micalizzi £3 million and ban him from any role in regulated financial services. This would be the largest fine ever imposed on an individual in a non-market abuse case. Mr Micalizzi has referred the matter to the Upper Tribunal, which may uphold, vary or cancel the FSA’s decision.
read more »
Posted in Financial services and market conduct, Regulators |
Comments Off
29 May 2012
A disaster merger, an ocean of debt, guarantees to dozens of (supposed) “superstar” lawyers, a seemingly disfunctional partnership…what could possibly go wrong? Dewey & LeBoeuf has last night filed for Chapter 11 bankruptcy in the US.
A run down of what went wrong from the New York Times.
All our Dewey stories are here.
Posted in Lawyers |
Comments Off
28 May 2012
According to research by the law firm Pinsent Masons, the Serious Fraud Office has not carried out a single dawn raid since its flawed search of the offices of the Tchenguiz brothers in early 2011.
That compares to a much greater level of activity in the preceding years, says Pinsents:
read more »
Posted in Lawyers, Risk management, UK government |
Comments Off
28 May 2012
The unravelling of the Greek economy’s infrastructure continues, with the brokerage firm Newedge informing clients that it will only process sell orders on Greek shares and will not extend margin loans on positions in Greek securities (Financial Times), and (more ominously) the large credit insurer Euler Hermes stating that it is reviewing coverage for exports to Greece (Bloomberg).
UPDATE 30 May 2012: Euler Hermes pulls cover on exporters to Greece
See also: A Eurozone exit: forex traders and retailers prepare
How would Greece actually carry out a Eurozone exit?
A Eurozone exit: Legal implications for companies and businesses
Posted in Europe, Financial services and market conduct, Risk management |
Comments Off
25 May 2012
From the Crown Prosecution Service news blog:
Andrew Penhale, Deputy Head of the CPS Central Fraud Group said:
read more »
Posted in Risk management |
Comments Off
24 May 2012
The Enterprise and Regulatory Reform Bill was published yesterday and contained within it at section 57 is confirmation that the Bill will start the process of giving shareholders of quoted companies a binding vote on directors’ remuneration.
read more »
Posted in Companies Act 2006 and company law, Corporate governance, Directors, UK government |
Comments Off
23 May 2012
The European Parliament has today adopted the Commission’s proposal for a financial transaction tax, and widened its scope. The Parliament’s press release is here and the text adopted is here (shows changes made by the Parliament to the Commission’s proposal). The Parliament’s vote is advisory at this stage and the Council can ignore or adopt the Parliament’s amendments. The timetable for the FTT remains:
read more »
Posted in Europe, Financial services and market conduct, Tax |
Comments Off
23 May 2012
Facebook’s IPO is turning into a legal and PR disaster. Here is a round-up of what’s gone wrong so far:
read more »
Posted in Corporate governance, Equity capital markets, Financial services and market conduct, Private equity, Regulators, United States |
Comments Off
22 May 2012
On Thursday 17 May, the share price of Pursuit Dynamics, an AIM-traded company, falls by nearly a quarter.
On the morning of Friday 18 May the company puts out this announcement, emphasising that it ”knows no reason for the recent share price falls” and that it expects to make an announcement about its joint development agreement with Proctor & Gamble on or before the publication of the company’s interim results on 24 May. That JDA with P&G being expected to provide half the company’s revenue for the year. Despite this announcement, the share price continues to fall.
At the opening of trading on Monday 21 May the company announces that P&G has informed it that P&G does not intend to proceed with the JDA. The shares go into freefall. They now stand at 12.5p – a long way from the 100p the shares were placed at in February 2012.
How very well-informed those selling shareholders were on Thursday and Friday last week!
Posted in Equity capital markets, Financial services and market conduct |
Comments Off
22 May 2012
Listed company makes public announcement to correct spelling error.
Posted in Equity capital markets |
Comments Off
21 May 2012
Rajat Gupta ran McKinsey for a decade and was then a board director at Goldman Sachs and Proctor & Gamble. Now this examplar of the financial elite is on trial for insider trading, accused of passing price sensitive information from board meetings of Goldmans and P&G to former hedge funder Raj Rajaratnam.
read more »
Posted in Financial services and market conduct, Regulators, United States |
Comments Off
19 May 2012
PLUS Markets Group plc announced yesterday evening that it has sold its PLUS Stock Exchange business to ICAP for nominal consideration. PLUS had said earlier this week that it was to close, having failed to find a buyer for any its businesses.
read more »
Posted in Equity capital markets, Financial services and market conduct, M+A |
Comments Off
18 May 2012
Back in February 2011 we covered the decision of the Insolvency Service to apply to the High Court, on behalf of the Secretary of State for Business, Innovation and Skills, for disqualification orders to be made against nine individuals in relation to their conduct as directors of European Home Retail Group PLC and/or Farepak Food & Gifts Limited (Farepak).
The trial has now been scheduled to start on 24 May.
read more »
Posted in Companies Act 2006 and company law, Directors |
Comments Off
17 May 2012
AIM-traded Gulf Keystone Petroleum announced last week that it was taking legal advice about comments posted on Internet bulletin boards, as we covered in this post.
Bloomberg today reports that, true to its word, GKP is now suing a bulletin board and Twitter user for defamation and malicious falsehood.
Posted in Equity capital markets, Financial services and market conduct |
Comments Off
17 May 2012
The Times reports today that Stobart Group, the logistics business best known for its distinctive lorry fleet, is launching a legal service that will connect retail customers and small businesses with barristers without going through a solicitor. Stobart will take a percentage of the fee charged by the barristers. The “Stobart Barristers” website is here.
read more »
Posted in Lawyers |
Comments Off
16 May 2012
The Financial Services Authority has, in its own words, “decided to ban” Anthony Verrier, a senior executive at BGC, following his conduct during litigation between Tullett Prebon plc and BGC. The FSA press release is here and the Decision Notice is here. Mr Verrier has appealed to the Upper Tribunal.
The High Court “found that in [Verrier’s] evidence Mr Verrier stuck to the truth where he was able to, but departed from it with equanimity and adroitness where the truth was inconvenient.”
As a consequence, the FSA has moved to ban Mr Verrier as it believes that he ”is not a fit and proper person due to concerns over his honesty, integrity and reputation”.
read more »
Posted in Financial services and market conduct, Regulators |
Comments Off
16 May 2012
The Financial Times reports today that Michel Barnier, the European Commissioner for the Internal Market and Services, will propose that shareholders should get a binding vote on directors’ pay in quoted companies when he makes his final recommendations on corporate governance in listed companies in autumn 2012.
For the UK, the suggestion simply replicates the Government’s own proposals for a binding vote confirmed in the May 2012 Queen’s Speech.
In his interview with the FT, Mr Barnier also suggests that:
read more »
Posted in Companies Act 2006 and company law, Corporate governance, Directors, Equity capital markets, Europe, Financial services and market conduct, Regulators |
Comments Off
16 May 2012
LegalZoom, “the leading online destination for small business and consumer legal services”, has filed its S-1 Registration Statement for an IPO that is expected to raise around $120 million.
The online business disintermediates the lawyer-client relationship, selling access to a variety of personalised legal documents to individuals and small businesses. $120 million will give LegalZoom the capital to expand its services and to move into new geographies, including the UK – so the IPO represents the zeitgeist both of US tech businesses coming to the public markets, and the delivery of law through alternative business structures.
read more »
Posted in Lawyers, United States |
Comments Off
15 May 2012
The Financial Services Authority has fined Habib Bank AG Zurich £525,000 and its MLRO £17,500 for anti-money laundering control failings. The FSA press release is here and the Final Notices are here (Habib) and here (Mr Hussain, the MLRO).
read more »
Posted in Financial services and market conduct, Regulators |
Comments Off
15 May 2012
The CFO of Francesca’s Holding Corp. has been removed after using Facebook and Twitter to disclose potentially price sensitive information. Apparently he thought he was being amusing.
The CEO of Best Buy left just before it emerged that the company had been investigating his “intense” relationship with a junior employee. Now the cover-up has caused the Chairman to go as well. (The Daily Mail gets to the heart of the matter in its inimitable style.)
And the CEO of Yahoo left after a hedge fund pointed out that his CV claimed he had a degree he hadn’t got.
Posted in Corporate governance, Directors, Risk management, United States |
Comments Off
15 May 2012
The ICAEW has published the results of a survey of 508 ICAEW members working in commercial businesses on “the impact of the Eurozone crisis on UK business”. The survey is here and an accompanying ICAEW blog post here. Amongst the findings:
read more »
Posted in Europe, Risk management |
Comments Off
14 May 2012
Posted in Europe, Risk management |
Comments Off
14 May 2012
The Financial Services Bill has completed its committee stage and the latest version of the Bill is here.
Posted in Financial services and market conduct, UK government |
Comments Off
14 May 2012
PLUS Markets Group plc, operator of the PLUS Stock Exchange and of a recognised investment exchange, has this morning announced that it is to close. The press release is here. The company had been in sale process, but nothing came of that.
For companies traded on the PLUS-quoted market, what will happen to their trading arrangements is unclear at the moment. Sharemark is offering free admission to PLUS companies until 2013. BritDAQ also offers a share matching service.
read more »
Posted in Equity capital markets, Financial services and market conduct |
Comments Off
14 May 2012
The CEO of Yahoo has left the company with immediate effect, after a hedge fund found material inaccuracies in his CV. He hardly gets a mention in the press release announcing his departure.
Posted in Corporate governance, Directors, United States |
Comments Off
14 May 2012
An attack on your fellow shareholder is likely to result – amongst other things – in an order under section 994 to have your shares bought out. Re Home & Office Fire Extinguishers Ltd has put the point beyond doubt. (H/T Hewetts Solicitors.)
Posted in Companies Act 2006 and company law |
Comments Off
11 May 2012
The CEO-designate of the future Financial Conduct Authority, Martin Wheatley, gave a speech on 4 May 2012 focusing on unresolved issues around how customers are treated across financial services. In Mr Wheatley’s words, “getting to grips with them is central to rebuilding confidence and trust, and key to the work of the new Financial Conduct Authority”, and he discussed the FCA’s new powers of product intervention in this context:
read more »
Posted in Financial services and market conduct, Regulators |
Comments Off
10 May 2012
The fund manager Martin Currie Investment Management has today announced that its directors and shareholders have invested a further £25 million into the company, following the record fine – also announced today – of £3.5 million imposed on Martin Currie by the Financial Services Authority.
read more »
Posted in Financial services and market conduct, Regulators, Risk management, United States |
Comments Off
10 May 2012
AIM-listed Gulf Keystone Petroleum Ltd has announced that it is taking legal advice “with regard to…continued and unfounded speculation on various bulletin boards and other social media sites”. That speculation centred on the possibility of GKP conducting a heavily discounted share placing, a possibility the company has denied.
Speculation and comments on retail investor bulletin boards can amount to market abuse under section 118 of the Financial Services and Markets Act 2000; see the guidance in MAR 1.8.6E of the FSA’s Code of Market Abuse.
The only action taken by the FSA against a bulletin board user for market abuse was in 2005.
Comments may also be libellous; see this 2010 Independent article about Nighthawk Energy plc’s threatened legal action against bulletin board posters.
Posted in Equity capital markets, Financial services and market conduct |
Comments Off
9 May 2012
John Gapper of the Financial Times on how the end of Dewey symbolises the changes coming for large law firms:
“Like Lehman, Dewey was a second-tier institution that over-borrowed and overextended itself in a push to become one of its industry’s global elite…
…In austere times, with greater cost pressures, law firms cannot borrow money and make rash promises to force their way into the top tier. Those beneath the UK’s “magic circle” and firms such as Cravath and Davis Polk in the US will have to be more like utilities. They will be lower-margin businesses doing higher volumes of ordinary work, perhaps owned by outsiders.”
For more Dewey, see here.
Posted in Lawyers, United States |
Comments Off
9 May 2012
Clinton Cards plc this morning had dealings in its shares suspended on the London Stock Exchange following an overnight coup by American Greetings Corporation – a move which may see AGC acquire some of the Clintons business via a pre-pack administration.
read more »
Posted in Equity capital markets, Restructurings, Takeovers |
Comments Off
9 May 2012
The two Bills in today’s Queen’s Speech that are of most interest from a company and financial law perspective are the:
The Enterprise and Regulatory Reform Bill
This will:
- Enshrine the “green” purpose of the Green Investment Bank, providing powers for it to operate including funding and ensuring its operational independence from Government.
- Create a single Competition and Markets Authority by combining the Competition Commission and the competition functions of the Office of Fair Trading.
- “Strengthen the framework” for directors’ pay, specifically by repealing section 439(5) of the Companies Act 2006 making it possible for directors’ remuneration to be contingent on the outcome of the shareholder vote on the remuneration report. The expectation is that the Government’s March 2012 suggestion that a binding vote on quoted company directors’ pay would require a supermajority to pass will not go ahead, with the vote instead being an ordinary resolution requiring a simple majority to pass.
- Simplify the regulatory system and give “confidence to business that they will not be held back by outdated and unnecessary legislation”…no details of how that will be achieved.
Banking Reform Bill
This will:
- Give the Treasury powers to make provision for ring-fencing by requiring that essential banking services are only provided in a ring-fenced bank, and defining services that a ring-fenced bank may not provide.
- Require the Prudential Regulatory Authority to ensure that a ring-fenced bank in a group is, as far as possible, independent of other entities in the group.
- Provide that depositors are treated as preferred creditors, paid before unsecured creditors on insolvency, and so reduce the exposure of the Financial Services Compensation Scheme and the taxpayer in insolvency.
Government Briefing Notes on the Bills here.
Posted in Companies Act 2006 and company law, UK government |
Comments Off
9 May 2012
The Hong Kong Securities and Futures Commission, in a consultation paper issued today, is proposing to put beyond doubt that IPO sponsors will have civil and criminal liability for untrue statements, including a material omission, in a prospectus.
read more »
Posted in Consultations, Equity capital markets, Financial services and market conduct, Regulators |
Comments Off
8 May 2012
The Financial Services Authority has fined Mitsui Sumitomo Insurance Company (Europe) Ltd £3,345,000 for “serious corporate governance failings” and banned one of MSIEu’s senior executives, Yohichi Kumagai, from carrying out any significant influence controlled function.
read more »
Posted in Financial services and market conduct, Regulators |
Comments Off
8 May 2012
Even the New Y0rk Times seems to have difficulty understanding how he got to that figure.
More end of Dewey news here.
Posted in Lawyers, United States |
Comments Off
7 May 2012
The European Commission published seven explanatory notes on 4 May 2012 that provide analysis and clarification on how the proposed EU financial transactions tax would work in practice. The notes and related webpage are here.
Posted in Europe, Tax |
Comments Off
6 May 2012
Oh dear…he said (and repeatedly filed at the SEC) that he has a degree in “accounting and computer science” – very useful if you want to run Yahoo. However, a hedge fund agitating for change and board seats at Yahoo has found out that it is actually only an accounting degree. Less useful. The fund is calling for the CEO, Scott Thompson, to be fired by Monday 7 May.
UPDATE 8 May 2012: Mr Thompson has now apologised for the disruption caused by disclosure of his incorrect CV, if not for the incorrect CV itself.
UPDATE 14 May 2012: He has now left Yahoo.
Posted in Corporate governance, Directors, United States |
Comments Off
6 May 2012
Posted in Equity capital markets |
Comments Off
