Court of Appeal found regulatory procedures fair
30/08/2002
An important legal precedent has been set by the Court of Appeal in its judgment in the case of Mr Bertrand Fleurose against the Securities and Futures Authority (SFA), one of the predecessor regulators to the Financial Services Authority (FSA). The Court of Appeal found that SFAs enforcement action against Mr Fleurose had been fair and had not been in breach of the European Convention on Human Rights (ECHR). The time for possible appeal to the House of Lords against this judgment has expired, and the formal statement of the original disciplinary case can now be set out.
The Court of Appeal concluded that:
SFAs disciplinary proceedings were civil in nature, not criminal, under the ECHR classification;
Mr Fleurose's rights to a fair trial were not infringed. In particular, the case against him was sufficiently clear for Mr Fleurose to understand what was alleged against him. And Mr Fleurose knew that his alleged action amounted to a breach of regulatory principles, so the allegations were not too vague for him to understand.
Mr Fleurose had been found guilty, by an independent SFA tribunal in June/July 1999 and by independent SFA Disciplinary Appeal Tribunal hearings in December 1999 and February/March 2000, of being a willing participant in a series of transactions the objective and effect of which was to depress the FTSE index. Mr Fleurose did not accept the verdict of the tribunals and applied for SFAs handling of his case through the Disciplinary Appeal Tribunal to be judicially reviewed in the courts. The key grounds he claimed for the review under ECHR were that: SFA enforcement procedures amounted, in effect, to a criminal prosecution; and, that the vagueness of the charge against him meant that he could not have a fair trial. All aspects of the judicial review application were rejected by the High Court on 26 April 2001, and then by the Court of Appeal on 21 December 2001.
A full SFA statement of the outcome of SFAs original enforcement action in this case is attached. Although the Appeal Tribunal was held in public and its outcome was public, the full SFA statement could not be released until after the conclusion of the judicial review hearings and expiry of the time for possible appeal. The attached statement is the final record of the case.
Notes for editors
The Court of Appeal judgment was handed down on 21 December 2001 by Lord Justice Schiemann, Lord Justice Clarke and Mr Justice Wall. The judgment can be found via Case No: CO/988/2000 2001/1033 on the Court Service's website (www.courtservice.gov.uk).
The High Court judgment was handed down by the Hon. Mr Justice Morison on 26 April 2001. This can be found on the British and Irish Legal Information Institute website - www.bailii.org (this site is referred to as a source by the Court Service website).
The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection of consumers; and fighting financial crime.
The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.