The Upper Tribunal has upheld the FCA's decision to ban Diego Urra, Jorge Lopez Gonzalez and Poojan Sheth from working in financial services.
The FCA had found that Mr Urra, Mr Lopez and Mr Sheth engaged in market manipulation when trading in Italian Government Bond futures (BTP futures) from 1 June 2016 to 29 July 2016.
In a 190-page judgment, the Upper Tribunal agreed with the FCA that the traders, who worked at Mizuho International Plc, had engaged in market manipulation. The traders appealed against the FCA's finding that they committed market abuse by placing large orders on one side of the order book to create false impressions of market demand or supply, facilitating the execution of smaller genuine orders on the opposite side of the order book. Once the smaller order had been executed, the larger order would be cancelled.
The Upper Tribunal agreed with the FCA that the three traders' aim was to undermine the integrity of the market by trying to mislead the market to benefit their own positions. The Upper Tribunal found in particular that the traders had each deliberately engaged in market abuse. It further found that this conduct was dishonest and lacked integrity (relevant to the FCA's imposition of prohibition orders - dishonesty is not part of the applicable test for determining whether a person has committed market abuse).
The Upper Tribunal took the view that some of the trader's explanations for their trading strategies were not plausible and did not accept them. It did not find Mr Urra to be a credible witness. It was also sceptical about Mr Lopez's evidence regarding the basis for placing large orders. The Upper Tribunal also found that Mr Sheth was aware of what he was doing when he placed the orders, even though his activities were led by Mr Urra.
The Upper Tribunal has the power to determine what, if any, is the appropriate action for the FCA to take, including in relation to the imposition and amount of any financial penalty. The Upper Tribunal did follow the FCA's five-step framework in determining the amount of the penalties, subject to a clarification and an adjustment. In the case of Mr Urra, it reduced the penalty from £395,500 to £223,400 on the basis that the relevant income to be taken into account at step 2 was limited to remuneration in respect of work undertaken in the relevant 12-month period which did not include prior earned sums which happened to vest in that period. In relation to Mr Sheth, whilst his conduct was assessed at level 4 seriousness, engaging the minimum £100,000 penalty, as his relevant income was significantly less than that of Mr Lopez his penalty was proportionately reduced to £57,600 (Mr Sheth's junior status and relative experience were not taken into account in calculating the appropriate penalty). The Upper Tribunal agreed with the FCA that the appropriate penalty to be imposed on Mr Lopez was £100,000. The Upper Tribunal also agreed with the FCA that, in addition, the traders should be banned from performing any function related to regulated activities.
The case illustrates the importance of good record keeping and good record retention, here in relation to trading strategy – formulation, rationale and sign-off. The FCA took over six years to issue a decision notice after the misconduct in question, followed by over two and a half years to finally conclude the matter. The FCA will resolutely pursue those potentially involved in market abuse, and firms and individuals need to be able to evidence the legitimacy of their behaviour.
Last week, the FCA published the final notices (which were all dated 5 August 2025) that it had issued to Diego Urra, Jorge Lopez Gonzalez and Poojan Sheth.
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