Mr Abbattista has referred the Decision Notice to the Upper Tribunal (the Tribunal) where he and the FCA will each present their cases. The Tribunal will then determine what, if any, is the appropriate action for the FCA to take, and will remit the matter to the FCA with such direction as the Tribunal considers appropriate for giving effect to its determination.
The Tribunal’s decision will be made public on its website. Accordingly, the proposed action outlined in the Decision Notice will have no effect pending the determination of the case by the Tribunal.
The Decision Notice outlines the reasons for the FCA’s actions.
The FCA considers that between 20 January and 15 May 2017, Mr Abbattista repeatedly placed in the market large misleading orders for Contract for Differences (CFDs), referenced to equities, which he did not intend to execute. At the same time, he placed smaller orders that he did intend to execute on the opposite side of the order book to the misleading orders.
Through his large and misleading orders, Mr Abbattista falsely represented to the market an intention to buy/sell when his true intention was the opposite. At the same time, his misleading orders were for volumes of shares far greater than the typical market size, which would also have created a false and misleading impression regarding the true supply of and demand for the shares in question to other market participants.
Mr Abbattista was aware of the risk that his actions might constitute market manipulation, but recklessly went ahead with those actions anyway.
The trading undertaken by Mr Abbattista was initially identified by the FCA’s internal surveillance systems. The FCA ingests order book data from the leading UK equity trading venues and then runs surveillance algorithms, designed to identify potentially abusive behaviours, across that consolidated data set.
The FCA considers that the fine and the prohibition sought reflect the serious nature of the breach set out in the Decision Notice and should act as a deterrent to other market participants.
Notes for editors
- The Decision Notice for Abbattista (PDF)
- Find out more about decisions made by the Tribunal.
- A CFD is an agreement between a customer and a financial institution, where the difference in value of a specified asset at the beginning and end of the contract is exchanged. To trade in these products a customer need only deposit a small percentage of the value of the contract. In the case of equities, these products allow customers to speculate on share price movement without the need to buy the underlying shares.
- On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the PRA.
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this, it has 3 operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more about the FCA.