Tribunal clears applicants in case of alleged market abuse

On 24 January this year the Financial Services and Markets Tribunal decided the reference to it by Mr Timothy Edward Baldwin and WRT Investments Ltd (the applicants) that allegations made by FSA against them both to the effect that they had engaged in market abuse contrary to section 118 FSMA 2000 had not been made out. In the course of clearing the applicants the Tribunal made one or two interesting comments of more general significance than merely the factual and evidential basis of this case as to the applicability of the market abuse regime, and these are worthy of noting here.

Joanna Gray, University of Newcastle, joanna.gray@newcastle.ac.uk

The FSA’s Allegations

Mr Baldwin, at the relevant time an equity salesman with Canaccord Capital (Europe) Ltd specialised in sales of UK securities in the smaller company sector to institutional clients. WRT Investments Ltd was his own personal investment vehicle. FSA alleged that Mr Nolan, the CEO of Minmet plc (an Irish mining and exploration company) had, during the course of a telephone conversation with Mr Baldwin on either 28 or 29 July 2003, told him of positive performance of a gold mine which was the company’s main asset. This was information, the FSA alleged, that was not generally available on the market and WRT Investments Ltd bought Minmet shares in reliance on this information, and sold them at a profit totaling some £20,500 shortly after the information was eventually announced to the market on 6 August 2003.