FCA progresses market abuse claim against Globo Plc chiefs
Summary
The FCA has commenced civil proceedings against the former CEO and CFO of Globo Plc for alleged market abuse.
The FCA alleges that former CEO Konstantinos Papadimitrakopoulos and former CFO Dimitris Gryparis made misleading statements that caused the company’s shares to be traded significantly above their true value prior to the company’s collapse in November 2015. The FCA is seeking compensation for investors adversely impacted by the alleged misleading statements.
The FCA obtained European Arrest Warrants for both defendants, who reside in Greece, and sought to extradite them to the UK to face criminal charges. However, in June and September 2019, the Hellenic Court of Appeal denied the UK’s extradition request. The FCA has since commenced the civil proceedings in the High Court and the regulator’s criminal case in the UK against Papadimitrakopoulos and Gryparis remains live.
The High Court recently issued a judgment rejecting an attempt by Papadimitrakopoulos to strike out the FCA’s civil proceedings. He had argued that the FCA made unlawful use of evidence obtained from Greece and other jurisdictions under criminal mutual legal assistance processes.
In rejecting Papadimitrakopoulos’s application, the High Court ruled that certain evidence had not been obtained for the purpose of the civil proceedings. The Court indicated that it may require the FCA to obtain consent from the Greek authorities concerning a part of its evidence.
The Court found that using this evidence for the purposes of civil proceedings was mistaken and - although unintentional and transacted in good faith - constituted an abuse of process. However, the Court ruled that the circumstances did not justify the FCA’s proceedings being struck out, and the case remains on foot. While some evidence obtained by the FCA cannot be used in the civil proceedings, the FCA does not believe this will will adversely affect its prospects in the case.