Judgment was handed down on 17th February in the Financial Services Authority’s (FSA) appeal to the CA of an earlier decision involving the Leeds-based law firm Fox Hayes.

Fountain Court members Timothy Dutton QC and Richard Coleman appeared for the FSA in this matter concerning Fox Hayes’ involvement with Madrid-based boiler room operators to sell high–risk illiquid shares in US companies to British investors who lost some US$20 million. Fox Hayes’ involvement included the vetting and approval of the boiler room’s mailshots to British investors, allowing its name to appear on these documents, the collection of investment money which was deposited in the firm’s own bank account and the issue of share certificates.

This was the first occasion on which the Court of Appeal has considered an appeal from The Financial Services and Markets Tribunal (FSMT), the appeal body for FSA decisions.  It followed two previous hearings. After an investigation into Fox Hayes’ activities the FSA fined Fox Hayes £150,000 in September 2006. That fine was subsequently reduced to £146,000 after Fox Hayes appealed to the FSMT. However, the FSA then appealed the FSMT decision to the CA. As a result the CA found that Fox Hayes conduct was reckless, and increased the fine against Fox Hayes to £954,770,  providing valuable guidance as to the correct approach to be taken in respect of the Conduct of Business Rules.

Timothy Dutton QC’s and Richard Coleman’s involvement in this high profile matter reflects Fountain Court Chambers’ increasing work in the regulated Financial Services sector. Fountain Court is widely acknowledged as the leading banking set and its expertise in this field has underpinned the development of this set’s complimentary financial services and regulatory practices.

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