Upper Tribunal Tax and Chancery Chamber

UT (Tax & Chancery) UT-2022-000134 UT-2022-000135 UT-2022-000137 - [2025] UKUT 00214 (TCC)

Fecha: 31-Ene-2025

Mr Urra

Mr Urra

866.

The Authority applied its five-step framework as follows:

(1)

The Authority has not identified any financial benefit that Mr Urra derived directly from the market abuse. Step 1 is therefore £0.

(2)

The figure at Step 2 is dependent on whether or not the market abuse was referable to the individual’s employment, and will be the greater of a figure based on “relevant income”, a profit multiple, and, for market abuse cases which the Authority assesses to be seriousness level 4 or 5, £100,000.

(a)

The relevant period for calculating Mr Urra’s relevant income is the 12-month period ending on 29 July 2016, and his relevant income for that period was £1,318,367.

(b)

Mr Urra intended to mislead other market participants, he knew that the misleading orders would give false or misleading signals to other market participants as to the supply of or demand for Futures, and he knew that placing misleading orders constituted market abuse as a result of his considerable experience in the market and the training that he had undertaken. This was repeated on multiple occasions in the Relevant Period, both alone and in concert with Mr Lopez and Mr Sheth. The Authority considered that he deliberately committed market abuse.

(c)

The Authority considered the following level 4 or 5 factors to be relevant: the market abuse was committed on multiple occasions during the Relevant Period; Mr Urra breached a position of trust by conspiring with his direct reports in an abusive strategy when he should have been setting an example for them through his conduct, and the market abuse was committed deliberately or recklessly.

(d)

The Authority considered the following level 1, 2 or 3 factors to be relevant: Limited profits were made or losses avoided, either directly or indirectly. However, Mr Urra aimed to execute his genuine orders more efficiently and manage better the risk on his book as a result of the placement of his misleading orders. This would have improved the performance of the Desk which was a factor taken into account in determining the bonus he was to receive.

(e)

The Authority also took into account that: Mr Urra is an experienced industry professional, held a senior position within MHI, held the Certified Roles of working in a Client Dealing Function, being a Material Risk Taker and being the Manager of Certified Persons (namely Mr Lopez and Mr Sheth) and before that had held a number of roles as an Approved Person; and the Authority usually expects to assess deliberate market abuse as seriousness level 4 or 5.

(f)

The Authority considered the seriousness to be level 4, which means the Step 2 figure is the higher of (i) 30% of Mr Urra’s relevant income of £1,318,367, ie £395,510, (ii) a profit multiple of 3 applied to his financial benefit of £0, ie £0, and (iii) £100,000. Step 2 is therefore £395,510.

(3)

The Authority concluded there are no aggravating or mitigating factors such as to justify an adjustment to the Step 2 figure. Step 3 is therefore £395,510.

(4)

The Authority considered this represents a sufficient deterrent to Mr Urra and others, and so has not increased the penalty at Step 4.

(5)

No settlement agreement has been reached, and Step 5 is therefore £395,510.

867.

The Authority therefore decided to impose a total financial penalty of £395,500 (ie the amount at Step 5 rounded down to the nearest £100) on Mr Urra.

868.

Mr George submitted that if the Tribunal found that Mr Urra did commit the market abuse alleged, the penalty of £395,500 which the Authority had decided to impose should be substantially reduced. This was on the basis that:

(1)

Mr Urra had endured significant hardship as a result of the matters giving rise to the reference, having lost a successful and lucrative career in London, been forced to relocate his family to Spain and has found it difficult to secure alternative employment. The penalty is grossly disproportionate.

(2)

The Authority’s calculation of “relevant income” had been based on the amounts received by Mr Urra in the 12 months, whether or not they were actually earned in that period. As a result, the Authority had included £573,567 awarded in respect of cash bonuses, awards and deferred shares received in the period 30 July 2015 to 29 July 2016 but earned two years prior.

(3)

The seriousness level should be no higher than level 3, as little or no profits were made or losses avoided; and there was no, or limited, actual or potential effect on the orderliness of, or confidence in, markets as a result of the market abuse.

(4)

The Authority found no mitigating factors, but Mr Urra relies on his cooperation during the investigation and he has an exemplary disciplinary record.

869.

The Tribunal adopts the Authority’s five-step penalty framework.

Step 1

870.

We have not identified any financial benefit that Mr Urra derived directly from the market abuse, so Step 1 is £0.