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ENF 14.6 FSA's choice of powers: financial penalties/public statements

ENF 14.6.1G

As with statements of public censure issued for other breaches of the requirements of the Act (see ENF 12), the FSA will consider whether to publish a statement that market abuse has occurred instead of imposing a financial penalty where it considers that such a statement may more appropriately address the particular behaviour in question.

ENF 14.6.2G

When considering whether a public statement is more appropriate than a financial penalty the FSA will take into account all the circumstances of the case. In particular, the FSA may have regard to factors similar to those in ENF 12.3.3 G. Those factors include the following.

  1. (1)

    If the person has made a profit or avoided a loss as a result of the behaviour, this may be a factor in favour of a financial penalty, on the basis that a person should not be allowed to benefit from market abuse or requiring or encouraging.

  2. (2)

    If the behaviour is serious in nature or degree, this may be a factor in favour of a financial penalty, on the basis that the sanction should reflect the seriousness of the behaviour (other things being equal, the more serious the behaviour, the more likely the FSA is to impose a financial penalty).

  3. (3)

    If the person has admitted the behaviour and provides full and immediate cooperation to the FSA, and takes steps to ensure that those who have suffered loss due to the behaviour are fully compensated, this may be a factor in favour of a public statement, rather than a financial penalty, depending on the nature and seriousness of the behaviour.

  4. (4)

    The FSA's approach in similar previous cases. The FSA will seek to achieve a consistent approach to its decisions on whether to impose a financial penalty or issue a public statement.

  5. (5)

    If the person has a poor compliance history. For example, where the FSA has previously taken action against the person for behaviour amounting to market abuse or requiring or encouraging which resulted in adverse findings, this may be a factor in favour of a financial penalty.

  6. (6)

    The impact of a financial penalty on the person concerned. In exceptional cases, if the person has inadequate means (excluding any manipulation or attempted manipulation of their assets) to pay the financial penalty which the behaviour would otherwise attract, this may be a factor in favour of a lower level of penalty or a public statement. Circumstances in which the FSA may be willing to issue a public statement include where there is verifiable evidence that the person would suffer serious financial hardship if it imposed a financial penalty.

ENF 14.6.3G

The list of factors in ENF 14.6.2 G is not exhaustive. Not all the factors may be relevant in a particular case, and there may be others that are relevant.