The Financial Services Authority (‘FSA’) has issued a Final Notice (dated 14 February 2013) fining Nestor Healthcare Group Limited (‘Nestor’) the sum of £175,000 for failing to take adequate steps as required by Listing Rule 9.2.8 1 and Listing Principles 1 and 22 to ensure that its board members and senior executives complied with the share dealing provisions of the FSA’s Model Code.
Although Nestor had introduced a policy on how senior Nestor staff intending to trade in the company’s shares should obtain clearance to deal, the FSA found that the breaches occurred mainly because Nestor’s weak procedures allowed the policy to be forgotten by the board. This, with other factors, led to purchases of Nestor shares by board members being carried out in breach of the Model Code. The FSA did not allege that any of the dealings referred to in the Final Notice were based on inside information. Nestor agreed to settle at an early stage of the FSA’s investigation and therefore qualified for a 30% discount on its financial penalty.
This case is an example of the FSA’s increasingly tough approach. It illustrates the lengths to which the FSA now expects companies to go in order to ensure compliance. It is a timely reminder that companies should:
- maintain comprehensive written records to support all dealings;
- regularly review their compliance policies and procedures generally; and
- ensure that their policies and procedures are, in fact, being followed in practice.
FSA Final Notice to Nestor Healthcare Group PLC available at: