Release Date: 20th December 2019
To access the original FCA document, click here.
Summary
The Financial Conduct Authority (FCA) has fined Kevin Gorman, a former Managing Director at Braemar Shipping Services plc (Braemar), £45,000 for failing to notify personal trades. Mr Gorman conducted these trades in his capacity as a person discharging managerial responsibility (PDMR) at Braemar.
Under the Market Abuse Regulations (MAR), PDMRs and those closely associated with them are required to notify the FCA and the issuer of any transactions on their own account above a certain threshold within three business days. This includes transactions in shares, debt instruments, derivatives, or other linked financial instruments of the issuer.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, emphasised the importance of transparency in trading by directors and responsible officers to maintain market integrity and prevent illegal insider trading. Directors of listed companies must report their trading promptly to avoid undermining market integrity.
Mr Gorman sold shares worth £71,235.28 on three occasions between 24 August 2016 and 18 January 2017 without informing the FCA or Braemar within the required three business days. However, the FCA found no evidence that Mr Gorman traded while in possession of confidential inside information.
Prompt notification of share transactions by senior managers is crucial for maintaining transparency, market participant confidence, and effective FCA supervision. Mr Gorman’s agreement to resolve the matter qualified him for a 30% discount on his penalty, resulting in a £45,000 fine.
Key Takeaways for Other Firms:
- Timely Reporting: Ensure that all PDMRs and closely associated persons report their trades to both the FCA and the issuer within the required timeframe.
- Transparency: Maintain transparency in trading activities to uphold market integrity and participant confidence.
- Compliance: Establish and enforce robust compliance procedures to adhere to MAR requirements and avoid regulatory breaches.
- Training and Awareness: Educate senior managers and responsible officers about their obligations under MAR to prevent similar violations.
In conclusion, the FCA’s fine against Kevin Gorman underscores the critical importance of timely and accurate reporting of trades by directors and senior managers. Firms must ensure strict adherence to MAR regulations to maintain market integrity and avoid enforcement actions.
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