header-logo header-logo

Playing with fire?

06 October 2011 / Simon Goldstone
Issue: 7484 / Categories: Features , Banking , Commercial
printer mail-detail

FSA v Alexander: playing the system, or manipulating the market, asks Simon Goldstone

The Financial Services Authority (FSA) fined Barnett Alexander, a self-employed trader, £700,000 in June for market abuse. Alexander’s scheme was to deal in shares so as to influence the price of derivative “contracts for difference” (CFD’s); he would make a profit on subsequent CFD trades on automated exchanges. The trades were on the open market, with willing participants on the basis of transparent prices.

A CFD is an agreement to exchange the difference in value of a share between the time when the contract is opened and the time when the contract is sold. A trader can agree to buy, then sell, a CFD in XCo if he thinks that the share value will go up; he can sell, then buy, if he thinks the market will fall. You can trade CFD’s without owning the underlying shares—think instead of CFD’s as shadowing the shares. The value of an XCo CFD is directly related to the price at which XCo shares are

If you are not a subscriber, subscribe now to read this content
If you are already a subscriber sign in
...or Register for two weeks' free access to subscriber content

MOVERS & SHAKERS

DWF—19 appointments

DWF—19 appointments

Belfast team bolstered by three senior hires and 16 further appointments

Cadwalader—Andro Atlaga

Cadwalader—Andro Atlaga

Firm strengthens leveraged finance team with London partner hire

Knights—Ella Dodgson & Rebecca Laffan

Knights—Ella Dodgson & Rebecca Laffan

Double hire marks launch of family team in Leeds

NEWS
Charles Pigott of Mills & Reeve reports on Haynes v Thomson, the first judicial application of the Supreme Court’s For Women Scotland ruling in a discrimination claim, in this week's NLJ
Charlie Mercer and Astrid Gillam of Stewarts crunch the numbers on civil fraud claims in the English courts, in this week's NLJ. New data shows civil fraud claims rising steadily since 2014, with the King’s Bench Division overtaking the Commercial Court as the forum of choice for lower-value disputes
The Supreme Court issued a landmark judgment in July that overturned the convictions of Tom Hayes and Carlo Palombo, once poster boys of the Libor and Euribor scandal. In NLJ this week, Neil Swift of Peters & Peters considers what the ruling means for financial law enforcement
Small law firms want to embrace technology but feel lost in a maze of jargon, costs and compliance fears, writes Aisling O’Connell of the Solicitors Regulation Authority in this week's NLJ
Artificial intelligence may be revolutionising the law, but its misuse could wreck cases and careers, warns Clare Arthurs of Penningtons Manches Cooper in this week's NLJ
back-to-top-scroll