On January 20, the UK Financial Services Authority (FSA) fined Wolfson Microelectronics plc (Wolfson) £140,000 ($193,000) for failing to reveal price-sensitive information to the market in a timely manner, leading to the creation of a false market in Wolfson shares for 16 days in March 2008.  

On March 10, 2008, Wolfson was informed by Apple Computer, one of its major customers, that Apple would not be using Wolfson as a supplier of chips for its iPod MP3 player. It was estimated that this would represent a loss of $20 million or 8% of Wolfson’s 2008 forecast revenue. At the same time, Apple also awarded Wolfson a contract to supply parts for the iPhone that should offset much of the loss from the iPod contract.  

Wolfson discussed the matter on March 12 with its investor relations advisors, who recommended that there was no need to disclose the negative news, and Wolfson delayed making an announcement on the basis of that advice.  

Wolfson reconsidered the earlier advice and eventually sought advice from its lawyers and corporate stockbrokers, contacting them on March 20 just before the Easter holiday. In a conference call on March 25 after the Easter holiday, Wolfson’s lawyers recommended disclosure. Wolfson disclosed the news early on the morning of March 27, and its share price went down roughly 18%.  

The FSA considered that Wolfson’s reliance on their investor relations advisors was insufficient. The breach of the disclosure obligation was quite clear. Their position might have been improved if they had consulted their lawyers earlier. The FSA stated: "Companies have the primary responsibility for meeting their disclosure obligations. While they may benefit from seeking advice from those in a position to comment on their regulatory requirements, they cannot rely, without due consideration, on such advice." The FSA emphasized that its position (set out in publications and previous enforcement cases) was that it was not acceptable to justify non-disclosure of information by offsetting negative and positive news. Companies must disclose both types of information and allow the market to determine whether they cancel each other out.  

Since Wolfson had co-operated with the FSA’s investigation it received a 30% discount of the £200,000 ($275,000) fine for early settlement.