In a historic judgement, a UK court recently delivered a verdict that the Financial Conduct Authority (FCA) is entitled to permanent injunctions and penalties amounting to £7,570,000 in total against three Hungary-based traders and a Swiss investment firm for manipulative trading strategy known as "spoofing" or "layering".
"Market abuse," said Mr Justice Snowden in his written judgment, "can cause serious harm, not only to other market participants and the many millions of private citizens whose personal wealth ad provision for retirement is invested on the financial markets, but also to the reputation of those markets more generally."
He added, "Protecting the integrity and proper functioning of those markets is a matter of substantial importance to individuals as well as to national and international economic interests. The policy imperative to prevent and deter market abuse is very clear."
Mineworld Ltd, Da Vinci Invest Ltd, Mr. Szabolcs Banya, Mr. Gyorgy, Mr. Tamas Pornye and Szabolcs Brad were found guilty of using unfair trading practices in connection to 186 listed shares.
The technique employed involved entering and trading of orders with respect to shares traded on the London Stock Exchange in such a manner as to create a counterfeit or misleading notion regarding the supply and demand for those shares, thereby causing them to trade those shares at an artificial price.
