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UT/2023/00014 - 17 - [2025] UKUT 00197 (TCC)
Fecha: 11-Mar-2025
Introduction
Introduction
The Financial Conduct Authority (“the Authority”) has applied for the Tribunal to issue a witness summons to Mr David Weller so that he is required to attend the hearing of these references to give evidence on behalf of the Authority. The references are listed for hearing between 15 September 2025 and 3 October 2025.
Mr Weller has been the subject of a previous application in which the Authority invited the Tribunal to issue a witness summons of its own initiative. Judge Herrington declined to do so for reasons set out in a decision released on 8 May 2024 with neutral citation [2024] UKUT 00115 (TCC). That decision was released following a case management hearing which considered various aspects of the references (“CMH 1”). I gratefully adopt Judge Herrington’s summary of the issues and the procedural history of the references at [1] – [28] of CMH 1.
In brief, the Authority’s case against the Applicants is that they were all concerned to some extent in the production and dissemination of a presentation which the Authority alleges proposed a manipulative trading strategy aimed at creating a false or misleading impression of the market in Qatari bonds (“the Presentation”). The Presentation was prepared in the Autumn of 2017. The Authority alleges that ideas in the Presentation were disseminated and subsequently published in two media articles.
The primary case of the First Applicant (“the Bank”) is that none of the persons alleged to be involved were acting in the course of the Bank’s business. As such, their actions and knowledge cannot be attributed to the Bank. In the alternative, the business described in the Presentation was not carried out with respect to regulated activities or ancillary activities in relation to designated investment business and therefore no obligations under the Authority’s Principles for Businesses could arise. Further, the Presentation was not disseminated as alleged by the Authority.
The Second Applicant held a branch senior manager function at the Bank. He denies any involvement with drafting or disseminating the Presentation.
The Third Applicant says that he was the Second Applicant’s assistant and had been undertaking some research for the Second Applicant. He had been acting on instructions and under the guidance of Mr Weller who was the person who prepared the Presentation. He believed that the Presentation was connected to the Rowland family business and was wholly unconnected to the Bank. He did not disseminate the Presentation save for passing it on to the Second Applicant.
Mr Weller also held a branch senior manager function at the Bank. He was the subject of a Decision Notice dated 17 January 2023 in relation to his alleged involvement in creating the Presentation, knowing that there was a material risk that it would be disseminated in order to market the Bank’s services to potential investors in the Middle East who might have reason to put economic pressure on Qatar. The Decision Notice set out the Authority’s decision to prohibit him from performing any function in relation to any regulated activity and to impose a fine of £54,000. Mr Weller decided not to refer his Decision Notice to the Tribunal. He accepts that he was involved in creating the Presentation but as a matter of fact disputes the Authority’s allegations as to the circumstances in which it was created. He says that it was never intended as a serious document.
Judge Herrington described the position of Mr Weller and the parties in relation to Mr Weller’s evidence at the time of CMH 1 at [94] – [97]:
In this case, as Mr Weller had indicated in advance of the case management hearing that he would object to being summonsed as a witness under Rule 16, I directed that in the interests of dealing with the matter efficiently he be invited to make submissions on the Authority’s application before any decision was made to summons him. It is clearly envisaged by the wording of Rule 16 (4) that a potential witness may be given the opportunity of objecting to the issue of the summons before it has in fact been issued, rather than being required to object after the event. Accordingly, Mr Strong KC made submissions on behalf of Mr Weller at the case management hearing as to why the Authority’s application should be refused.
The Authority contends that Mr Weller should be required by the Tribunal to give evidence as a neutral witness under Rule 16 of the Rules. The Authority says that the unusual circumstances of this case are such that it is appropriate for both the Authority and the Applicants to be permitted to cross-examine Mr Weller. The Authority contends that it is clear that Mr Weller’s evidence is likely to be of substantial assistance to the Tribunal, having regard to his role in the creation of the Presentation and his status as a senior employee at the Bank’s London Branch. However, it says that it would not be appropriate for the Authority to call Mr Weller as its own witness, in circumstances where (i) the Authority has found that Mr Weller’s conduct in relation to the Presentation lacked integrity; (ii) there is an absence of regulatory finality as between the Authority and Mr Weller (with the Authority being precluded from issuing a Final Notice to him pending the determination of these references); and (iii) the Authority does not accept important aspects of Mr Weller’s characterisation of relevant events, including his own conduct in relation to the Presentation.
The Authority therefore says that the Tribunal should give directions to the parties to facilitate Mr Weller giving evidence as a neutral witness.
None of the Applicants wish to call Mr Weller as a witness. However, they have made it clear that if he were to be called as a witness by the Authority or by the Tribunal on its own initiative then they would wish to cross-examine him. They oppose the Authority’s invitation that Mr Weller be treated as a neutral witness on the basis that it is open to the Authority to call him as their own witness even in circumstances where some of his evidence undermines the Authority’s case.
The Authority’s position in CMH 1 was recorded at [117] and [118] as follows:
Mr Purchas explained the rationale for the application as follows:
The circumstances of the present case are unusual. The Authority has issued four Decision Notices in respect of materially the same factual circumstances but only three of those decisions have been referred to the Tribunal. Further, because Mr David Rowland has made a third-party reference in relation to Mr Weller’s Decision Notice, the Tribunal has held that the Authority is precluded from issuing a Final Notice to Mr Weller.
The net sum of these unusual circumstances is that Mr Weller, despite not being a party to these proceedings, maintains a real interest in their outcome, notwithstanding his decision not to contest the allegations against him any further, including because Mr Edmund Rowland and Mr Bolelyy seek to place all the blame for the improper nature of the Presentation on Mr Weller. Put another way, the consequence of the Applicants’ references and that of Mr David Rowland in particular is that Mr Weller has indirectly been brought back into the fold in regulatory proceedings which he has sought to avoid. If the Tribunal was to make findings different to those reached by the Authority in Mr Weller’s Decision Notice, by reason of Mr David Rowland’s third party reference, the Authority might be required to issue a Further Decision Notice to Mr Weller.
Mr Weller’s evidence is likely to be of substantial assistance to the Tribunal, in circumstances where (i) Mr Weller was one of a very small number of individuals who attended both the meetings held on 13 September [2017] and has had and is likely therefore to have relevant evidence to give as to the Presentation’s origins and the purposes for which it was created; (ii) Mr Weller contributed materially to the contents of the Presentation; and (iii) Mr Weller was at all material times a senior employee of the Bank and authorised as an SMF21 (such that he has had and is likely to have relevant evidence to give as to the wider context surrounding the Presentation).
Mr Rowland and Mr Bolelyy seek to portray Mr Weller as solely responsible for the improper nature of the Presentation, Mr Edmund Rowland going so far as to allege that in December 2017 Mr Weller threatened to “blame anyone he could” for the Presentation unless he was paid £200,000.
Mr Purchas submitted that it would be inappropriate for the Authority to call Mr Weller as its own witness because:
The Authority has found that Mr Weller’s conduct in relation to the Presentation lacked integrity. That has obvious implications for the appropriateness of the Authority calling Mr Weller to give evidence as its own witness, particularly in circumstances where Mr Weller’s recklessness is a live issue between the Authority and the Bank.
The absence of regulatory finality as between Mr Weller and the Authority means that Mr Weller has a direct personal interest in the outcome of these proceedings, which interest may well be at odds with the Authority’s regulatory objectives and the RDC’s conclusions in the Decision Notices. It would not be appropriate, in the Authority’s view, for it to embark upon a process of producing a witness statement with Mr Weller in relation to the very events in respect of which the Authority alleges that his conduct lacked integrity, particularly where the regulatory action which the Authority proposes to take against Mr Weller cannot take effect pending the determination of these references.
The Authority does not accept important aspects of Mr Weller’s characterisation of relevant events, including his own conduct in relation to the Presentation. It would not be entitled to cross-examine him on those matters which would undermine the Tribunal’s ability to determine these references on the basis of the best available evidence. Although the Tribunal could hear the Authority’s submissions as to why Mr Weller’s evidence in respect of such matters should not be accepted, it would not have the benefit of Mr Weller’s response to those submissions, because the Authority will not be permitted to cross-examine him and he will not have the opportunity to respond to the allegations made against him. That would place the Tribunal in an unsatisfactory position and would be inconsistent with the overriding objective. Furthermore, it would cause some unfairness to Mr Weller himself, who will be deprived of the opportunity to respond to the Authority’s case in respect of the areas where the Authority does not entirely accept his characterisation of events.
It is important to note that at [119], Judge Herrington concluded that Mr Weller’s evidence would be highly relevant to the references:
I make no criticism of the Authority for having aired this proposal before the Tribunal. It is, as the Authority says, an unusual situation. I have no doubt that, for the reasons given by Mr Purchas, as summarised at [118(3)] above, Mr Weller’s evidence is highly relevant to the matters that the Tribunal has to determine.
It appears that the reference to [118(3)] was intended as a reference to [117(3)]. Judge Herrington went on to conclude that it would not be appropriate for the Tribunal to call Mr Weller as its own witness. He gave five reasons for reaching this conclusion. First, he considered that there were “formidable practical difficulties” and the Tribunal would be forced to enter the arena in obtaining Mr Weller’s evidence in chief. That is not relevant for present purposes. The Judge’s other reasons are relevant:
However, this is not a case where the Tribunal is truly acting on its own initiative, as envisaged by the Rules. In reality, as Mr Strong submitted, this is an application by the Authority for the Tribunal to summons a witness who the Authority believes can assist its case in some respects, but who it also believes will give evidence that might undermine the Authority’s case. If I were to grant the application, then in effect the Authority would be able to circumvent the “non-impeachment principle”.
In those circumstances, as Mr Strong submitted, where the Authority believes that Mr Weller has relevant evidence to give on the issues that are before the Tribunal, then it should seek to call him as its witness.
Secondly, it is not clear that on the basis of the Authority’s explanation as to why it cannot call Mr Weller that he is to be regarded by them as not being a witness of truth, at least in relation to the matters on which they wish him to give evidence. There is no allegation of dishonesty against Mr Weller on the part of the Authority; it seems to me that the dispute between the Authority and Mr Weller is as to how his behaviour and the events concerned are to be characterised.
Thirdly, as the authorities cited above indicate, there is no bar, in civil or criminal litigation, to a party submitting that part of what its own witness says should not be accepted in the light of evidence from another witness, even if the party concerned cannot cross-examine its own witness. There will be plenty of evidence, including evidence given by the Applicants and the relevant documentation which will give the Authority ample opportunity to make submissions on that basis.
Fourthly, it is not clear that the Authority regards it as essential that it has evidence from Mr Weller in order to make out its case against any of the Applicants. As regards the dispute about the meetings held on 13 September 2017, the Authority has the evidence of Mr Unwin, who also attended the meeting and whom the Authority interviewed. For its case on attribution, the Authority relies on the actions of Mr Edmund Rowland as well as the actions of Mr Weller.
Fifthly, I accept that Mr Weller has strong reasons for not wishing to participate in the proceedings. He made the decision not to contest the findings in his Decision Notice. I was told that this was because he wished to draw a line under a painful and protracted episode for the sake of his health and his family. If he had referred his Decision Notice, his reference would have been heard with the present references and he could not have been called by the Authority or the Tribunal as a witness. In my view it would be highly undesirable to require the subject of regulatory proceedings to submit themselves for cross-examination in the Tribunal in relation to his own regulatory proceedings. As the Authority has noted, in the absence of a Final Notice, the regulatory proceedings against Mr Weller have not yet been concluded and it is possible that the Authority may have to consider the issue of a Further Decision Notice in the light of any findings made in respect of Mr David Rowland’s third-party reference. Those circumstances are a strong indication that it would not be fair for Mr Weller to be compelled to give evidence against his wishes to draw a line under the proceedings.
When the Judge referred at [123] to the “non-impeachment principle” he was referring to a principle described by Leggatt LJ in R v Smith (Jordan) [2019] EWCA Crim 1151 at [28]:
The relevant principles can, we think, be summarised as follows:
Subject to the overall control of the court, the prosecution has a discretion as to what witnesses to call at a trial, but that discretion must be exercised in accordance with the interests of justice and the general duty of the prosecution to put all evidence which it considers relevant and capable of belief before the jury.
It is open to the prosecution - and indeed the interests of justice may require it - to call a witness to give evidence only part of which the prosecution considers to be worthy of belief.
In such circumstances the prosecution is in principle entitled to adduce other evidence to contradict that part of the witness's evidence which the prosecution considers to be inaccurate or false, and to invite the jury to reject that part of the witness's evidence.
That may be done without applying to treat the witness as hostile. However, unless the witness is declared hostile, evidence adduced to contradict the witness may not include a previous inconsistent statement of that witness, nor is the prosecution, as the party calling the witness, entitled to cross-examine the witness.
These principles were in the context of a criminal prosecution before a jury and were cited by Judge Herrington at [105]. At [106] he concluded that there was no reason the same principles should not apply to the regulatory proceedings in these references. There is no specific challenge to that conclusion, although it appears to me that the principles may operate differently in the context of regulatory proceedings before a specialist Tribunal. I address this further below.
Following Judge Herrington’s decision in CMH 1 not to summons Mr Weller, the Authority wrote to Mr Weller’s solicitors asking whether he would be willing to give evidence voluntarily. Mr Weller declined to do so. The Authority accepted that Mr Weller had “understandable concerns” as to the possibility that further adverse findings might be made against him. The Authority therefore offered reassurance that if having heard his evidence the Tribunal did make findings against him which were more adverse than those contained in its Decision Notice, then it would not seek to increase his financial penalty (“the Reassurance”). The Authority noted however that in those circumstances it may need to issue a Further Decision Notice reflecting the findings of the Tribunal. The Authority stated that if Mr Weller chose to refer any Further Decision Notice to the Tribunal, the Authority would not seek to increase the financial penalty. The Authority did recognise that if Mr Weller did refer a Further Decision Notice then the Tribunal itself could decide to increase the penalty. Despite the Reassurance, Mr Weller remained unwilling to give evidence voluntarily.