Former Non-Executive Chairman Of UK-Listed Company Fined For Unlawfully Disclosing Inside Information As A Result Of Negligence

• Published date: 12 August 2022
• Subject Matter: Finance and Banking, Corporate/Commercial Law, Litigation, Mediation & Arbitration, Financial Services, Commodities/Derivatives/Stock Exchanges, Corporate and Company Law, Professional Negligence
• Law Firm: Cadwalader, Wickersham & Taft LLP
• Author: Mr Michael Sholem and Camillo Di Donato

Christopher Gent, a former CEO of Vodafone Group plc and non-executive Chairman of GlaxoSmithKline plc, was appointed as the non-executive Chairman of ConvaTec Group Plc ("ConvaTec"), a company admitted to trading on the London Stock Exchange ("LSE"), in October 2016 and held this position until retirement in May 2019. In his role, Mr. Gent was responsible for governance over, and closely involved in the preparation of, ConvaTec's issuance of key company news ("RNS") announcements to the LSE. In October 2018, Mr. Gent previewed the release of an expected RNS announcement relating to the downward revision of ConvaTec's financial guidance and the retirement of ConvaTec's CEO before such information had been announced to the market. The disclosures were made to two individuals in senior positions at two of ConvaTec's major shareholders under the belief that it was in the best interests of ConvaTec that these investors received the information ahead of the public announcement (which was made five days after the private communications). The UK Financial Conduct Authority ("FCA") determined that Mr. Gent's actions amounted to an unlawful disclosure of inside information and that he therefore committed market abuse in breach of the UK Market Abuse Regulation ("MAR"). He was fined '80,000.

The factors relevant to the FCA's assessment over the conduct at issue were that Mr. Gent was an experienced industry professional and held a senior position within his...