Wheatley Review publishes final report on LIBOR

The Wheatley Review of LIBOR, which was commissioned by HM Treasury to review the London Inter-Bank Offered Rate (LIBOR), has issued its final report. In a speech publicising the report Martin Wheatley set out a ten-point plan to comprehensively reform LIBOR. His recommendations focus on:

  • a new statutory basis to allow the FSA (and subsequently the Financial Conduct Authority) to regulate firms and individuals who submit rates to LIBOR, including criminal sanctions for those who attempt to manipulate it;
  • transferring the LIBOR oversight and governance role from the British Bankers' Association (BBA) to a new administrator;
  • rules that could be used to govern LIBOR in the future, including a process for verifying submissions against hard data, but acknowledging that some degree of judgement will have to be retained;
  • immediate improvements that can be made to LIBOR - including increasing the number of banks that submit rates to LIBOR; and
  • encouraging the Government to engage with international bodies to coordinate the long-term future of LIBOR and other financial benchmarks.

Four charged with insider dealing

The FSA has announced that four men have been charged with conspiracy to deal on the basis of inside information between 1 November 2006 and 23 March 2010. Martyn Dodgson, Andrew Hind, Benjamin Anderson and Iraj Parvizi face charges arising out of a long-running joint investigation between the FSA and the Serious Organised Crime Agency (SOCA). The investigation is the FSA's largest and most complex insider dealing investigation to date.

Tribunal upholds decision to ban and fine Swiss fund manager and two former Cantor Fitzgerald traders for market abuse

The Upper Tribunal (Tax and Chancery Chamber) has directed the FSA to fine Stefan Chaligné, a Swiss-based hedge fund manager £900,000 (together with disgorgement of financial benefit of  €362,950) and Patrick Sejean, a former senior salesman on Cantor Fitzgerald Europe’s (CFE) London-based French desk £650,000. The FSA decided not to fine a third individual, Tidiane Diallo, because it accepted that he was in a position of serious financial hardship. The Tribunal also directed the FSA to ban all three individuals from performing any role in regulated financial services.

Chaligné, a French National who was both the fund manager of, and a shareholder in, the Cayman Islands based “Iviron” hedge fund deliberately manipulated the market in a total of nine securities traded on a number of different European and North American exchanges. He manipulated the market by placing orders, through CFE, designed to increase the closing price of the securities, and thereby increase the value of the hedge fund, on two key portfolio valuation dates for the fund.

FSA charges individual with operating unregulated investment scheme

The FSA has charged Ben Wilson of Bournemouth, Dorset with seven offences relating to the operation of an unauthorised collective investment scheme. Mr Wilson, who traded as SureInvestment, operated a scheme purporting to carry out futures trading for investors. Mr Wilson has been bailed to attend City of London Magistrates Court on 5 October 2012.