UK watchdog’s market abuse case can proceed despite evidence error

  • Summary
  • Companies
  • Related documents
  • FCA lawsuit against ex-Globo executives continues
  • Court refuses to throw out case over misuse of evidence

(Reuters) – Britain’s financial watchdog can continue a market abuse lawsuit against two former executives of a collapsed U.K. mobile technology firm despite wrongly using evidence obtained from Greek authorities, a judge in London ruled on Friday.

The Financial Conduct Authority (FCA), however, cannot use the material in its civil case against Globo Plc’s former chief executive Konstantinos Papadimitrakopoulos and its ex-chief financial officer Dimitris Gryparis, Judge Joanna Smith said.

She said the FCA had obtained the information in order to bring a criminal case against the pair, which foundered when attempts to extradite them from Greece were blocked and had not then obtained consent to use the material in civil proceedings.

But the judge rejected Papadimitrakopoulos’ bid to throw out the lawsuit, which alleges he and Gryparis made misleading statements about Globo’s value before it collapsed in 2015.

The FCA said in a statement that it considers the ruling “will not impact its prospects in the [civil] case”. The watchdog – which opened an investigation into Globo back in 2015 – added that its criminal case against Papadimitrakopoulos and Gryparis “remains live”.

Papadimitrakopoulos’ lawyer Hannah Raphael said in a statement that her client was “pleased” with the ruling. Gyparis could not be reached for comment.

The FCA is seeking compensation for investors who it says lost money as a result of Papadimitrakopoulos’ and Gryparis’ misleading statements about Globo’s value.

It obtained information, including audit files for Globo’s Greek subsidiary, in 2016 and 2018 following a request for assistance from the Greek authorities to build a criminal case.

Papadimitrakopoulos argued the material had been wrongly used in the civil proceedings as the Greek authorities had only given consent for it to be used in a criminal case.

Smith said the FCA should have sought consent for the material to be used in the civil case and that its use amounted to “an actual, or (at least) potential, continuing unlawful use”, though she found the FCA had “acted in good faith”.

The judge ruled that the use of the material amounted to “an abuse of the process of the court”, but refused to throw the case out as a fair trial is not “impossible”.

The case is Financial Conduct Authority v Papadimitrakopoulos and another, BL-2019-002023.

For the FCA: Andrew George KC and Rayan Fakhoury of Blackstone Chambers, and the FCA

For Papadimitrakopoulos: Graham Brodie KC of 33 Chancery Lane, Richard Power of Fountain Court Chambers, and BCL Solicitors

For Gryparis: Andrew Hunter KC of Blackstone Chambers, Leonora Sagan of Fountain Court Chambers, and Boutique Law

Our Standards: The Thomson Reuters Trust Principles.

Read More

Laine Wrona