September 28, 2020

UK FCA proposes £100,000 fine for market abuse by portfolio manager

On September 16, 2020, the UK Financial Conduct Authority published a Decision Notice recommending the imposition of a financial penalty of £100,000 on Corrado Abbattista, founding partner and Chief Investment Officer at Fenician Capital Management LLP, for engaging in market manipulation, in contravention of Article 15 of the Market Abuse Regulation.*  The Decision Notice also prohibits Abbattista from performing any function in relation to regulated activities conducted by authorized persons, or by exempt professional firms or persons.

As described in the Decision Notice, between January and May 2017, Abbattista placed large contract for difference orders referenced to listed equities designed to materially impact the market, which Abbattista did not intend to execute.  At the same time, he placed smaller orders, portions of which he concealed, which he did intend to execute.  According to the FCA, Abbattista recklessly pursued this course of conduct, despite being aware that his actions would have created a false and misleading impression regarding the true supply of and demand for the shares in question. Furthermore, Abbattista persisted in placing the misleading orders even after a respected colleague expressed misgivings about their legitimacy.

In calculating the appropriate penalty, the FCA determined that Abbattista did not derive any personal financial benefit from the alleged market abuse; however, Abbattista was an experienced industry professional at the time of the abuse, the market abuse was committed on multiple occasions, and was deliberate and reckless. 

The FCA’s Decision Notice has been referred to HM Upper Tribunal (Tax and Chancery Chamber), where the parties will be given the opportunity to present their case; the Tribunal will then remit the matter to the FCA to proceed according to the Tribunal’s determination.
*Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse

FCA press release | Decision Notice