FCA fines former managing director £45,000 for failure to notify personal trades

Mr Gorman carried out the trades in his capacity as a person discharging managerial responsibility (PDMR) at Braemar.

Under the Market Abuse Regulations (MAR), persons who are PDMRs and those closely associated with them are required to notify the FCA and the issuer of every transaction conducted on their own account above a certain threshold within 3 business days. 

This includes transactions in the issuer’s shares, debt instruments, derivatives or other linked financial instruments.

Mark Steward, Executive Director of Enforcement and Market Oversight, said:

'Transparency of trading by directors and other responsible officers is a key element of market integrity and helps to police the market against illegal insider trading. Directors of listed companies, like Mr Gorman, must ensure they report their trading on time or risk undermining market integrity.'

Mr Gorman was found to have sold shares worth a total of £71,235.28 on 3 occasions between 24 August 2016 and 18 January 2017 without informing the FCA or Braemar within the required 3 business days. The FCA did not find that Mr Gorman traded whilst in possession of any confidential inside information.

Senior managers notifying the FCA and issuers of their share transactions in a prompt manner is integral to transparency for market participants and maintaining confidence in the markets, as well as the FCA’s effective supervision of the markets.

On account of Mr Gorman’s agreement to resolve the matter, he qualified for a 30% discount on his penalty, resulting in a £45,000 fine.

Notes to editors

1. The final notice for Kevin Gorman[1].
2. On 3 July 2016, the FCA became responsible for the enforcement of the relevant provisions of MAR.
3. This is the first enforcement action by the FCA for a breach of Article 19(1) of MAR.
4. The prompt notification to issuers and the FCA of transactions in the shares of the issuer conducted by PDMRs on their own account, or by persons closely associated with them, is a means for the FCA to supervise markets and provides important information for market participants. Market participants have a legitimate interest in knowing the trading behaviour of an issuer’s management and whether an issuer’s management trades are undertaken in accordance with the requirements under MAR. Such market transparency limits the potential perception of information asymmetry and is a prerequisite for the confidence of markets and of the company’s shareholders.
5. Share dealing notifications, like suspicious transaction and order reports (STORS) and transaction reports, provides important data for the FCA. Anyone who does not comply with their reporting obligations runs the risk of enforcement action.
6. The FCA makes no finding as to the adequacy of Braemar’s compliance with, and its policies and procedures in relation to MAR.