FSA wins case against Winterflood
by Richard Kilner
Story link: FSA wins case against Winterflood
The Financial Services Authority (FSA) has announced that its case against Winterflood and two of its traders, Mr Sotiriou and Mr Robins at the Financial Services and Markets Tribunal (the Tribunal) has proven successful.
Winterflood is the largest market maker in AIM securities and is authorised by the FSA.
In June last year the FSA asserted that the firm took part in an illegal share ramping scheme regarding Fundamental-E Investments Plc (FEI).
The FEI share market was distorted and Winterflood was found to have misled the market for some six months during 2004.
Winterflood made some £900,000 in FEI share trading, and the FSA considered that it did not take the necessary steps to ensure all its trades were genuine.
As a result of this the FSA imposed a fine of £4m on Winterflood itself and £200,000 and £50,000 on Sotiriou and Robins respectively.
FSA enforcement director Margaret Cole has stated that Winterflood failed to recognise or appropriately respond to the warning signs that wrongdoing had occurred.
In response Close Brothers Group has announced it is seeking permission to appeal.
In a press release Close Brothers have stated that neither Winterflood nor its traders knowingly participated in any wrongdoing regarding market abuse.
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