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

The basis on which the Authority has pleaded its case against the Traders is set out above. The Authority has not pleaded in its Amended Statements of Case that the Traders’ conduct was reckless, nor has it applied to the Tribunal to amend further its Amended Statements of Case to plead recklessness in the alternative.

The Authority served its written skeleton argument on 20 January 2025 in accordance with the Tribunal’s directions, and that included the following:

“42.

In order to establish market abuse, the Authority does not need to go further than that and show that the Traders knew that they were committing market abuse or that they were acting in a way which was dishonest or reckless.

43.

Whether the Traders behaved recklessly or dishonestly is however a consideration which arises in relation to the prohibition order … as well as being relevant to the level of penalty…”

Then, in a footnote to the Authority’s summary of the principles relevant to the imposition of a penalty, the skeleton included:

“FN147. For the avoidance of doubt, the Authority does not positively say that the Applicants’ conduct was reckless in circumstances where it is alleged to have been deliberate and dishonest. If, however, under its broad powers under s. 133(5), the Tribunal finds that market abuse is made out against the Applicants, but that their conduct fell short of being dishonest, the Tribunal will nevertheless have to address whether to apply a penalty against the Applicants and, if so, at what level. In order to address that question, it will have to consider the nature of their conduct, including whether it was reckless, on any view.”

In their opening submissions Mr George, Mr Jaffey and Mr Bailin each objected to this inclusion of a reference to recklessness in the Authority’s skeleton on the basis that the Authority has throughout imposed sanctions and pleaded its case on the basis that the Traders’ conduct was deliberate and dishonest. The parties made submissions in closing as to the jurisdiction of the Tribunal by reference to the decision of the Court of Appeal in Financial Conduct Authority v Bluecrest Capital Management (UK) LLP [2024] EWCA Civ 1125 and the Authority’s obligations under The Tribunal Procedure (Upper Tribunal) Rules 2008 (the “Upper Tribunal Rules”), in particular under paragraph 4(2)(c) of Schedule 3 that the Authority’s statement of case “set out all the matters and facts upon which the respondent relies” as well as to the principles relevant to the exercise of the Tribunal’s discretion to allow amendments and the Tribunal’s role under s133(4) to (7) FSMA 2000 on a reference.

On the basis of our decision on the Authority’s pleaded case, the Tribunal has not needed to address these issues further and does not do so.