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Offences relating to financial services - Coggle Diagram
Offences relating to financial services
The offences
The Financial Services Act 2012 establish 3 offences in relation to
Misleading statements
Applies where a person acts in one or more of the following ways
Makes a statement which they know to be false or misleading in a material respect
Makes a statement which is false or misleading in a material respect, being reckless as to whether it is
Dishonestly conceals any material facts whether in connection with a statement made or otherwise
Where a person has engaged in one or more of these types of conduct then an offence will be committed if the person makes the statement or conceals the facts with the intention od inducing or is reckless as to whether making it or concealing made induce another person
To enter into or offer to enter into or to refrain from entering into a relevant agreement
To exercise or refrain from exercising any rights conferred by a relevant investment
Defence
If they can show that the statement was made in conformity with price stabilising rules, control of information rules or the exemption for buy back programmes and stablisation
Misleading omissions
A person who does nay act or engages in any course of conduct which creates a false or misleading impression as to the market in or the price or value of any relevant investments
An offence is committed if P intends to create that impression and either of the 2 conditions are met
Intends to induce another person to acquire, dispose of, subscribe for or underwrite the investments or to refrain from doing so or to exercise or refrain from exercisign any rights conferred by the investments
Knows that the impression is false or misleading or is reckless and intends by creating that impression to make a gain or cause loss to another person
Defendants charged under s.90 can raise a defence if they can show that
They reasonably believed their conduct would not create an impression that was false or misleading
They acted or engaged in the conduct for the purpose of stabilising the price of investments and in conformity with price stabilisation rules
They acted or engaged in the conduct in conformity with control of information rules
They acted or engaged in the conduct with the exemption for buy back programmes and stabilisation found in Article 5 of MAR
Misleading statements in relation to benchmarks
The first offence provides that a person who makes to another person a false or misleading statements commits an offence if
Makes the statement in the course of arrangement for the setting of a relevant becnhmark
Intends that the should by used by another for the purpose of the setting of a relevant benchmark
Knows that the statement is false or misleading or is reckless as to whether it is
The second offence provides that a person who does any act or engages in any course of conduct which creates a false or misleading impression as to the price or value of any investment or as to the interest rate appropriate to any transaction, commits an offence if
They intend to create the impression
The impression may affect the setting of a relevant benchmark
They now that the impression is false or misleading or is reckless as to whether it is
They know that the impression may affect the setting of a relevant benchmark
Can apply to legal persons also
Defences
The defendant acted or engaged in the conduct for the purpose of stabilising the price of investments and in conformity with price stabilisation rules
The defendant acted or engaged in the conduct in conformity with control of information rules
The defendant acted or engaged in the conduct in conformity with the exemption for buy back programmes and stabilisation found in Article 5 of MAR
Penalties and sanctions
A person who is guilty is iable
On summary conviction, to a fine and/or imprisonment for a term not exceeding 12 months
On conviction on indictment a fine and/or imprisonment for a term not exceeding seven years