On the 9th May 2025, Matthew and Nikolas West (“the brothers”) pleaded guilty to insider dealing in the shares of four companies between November 2016 and January 2020 (“the period”), following a prosecution brought by the Financial Conduct Authority (FCA). Matthew West also disclosed inside information to Nikolas West in relation to a fifth company, who in turn used this inside information to deal.
During the period, the brothers acted as day traders via companies that were controlled by them. Through these companies, the brothers deliberately disclosed and used information that was legitimately disclosed to them by brokers after agreeing to be ‘wall-crossed’ to trade.
The total profits obtained from the illegitimate trading activities totalled £42,498.
Steve Smart, Joint Executive Director of Enforcement and Market Oversight at the FCA said “Matthew West repeatedly tried to make a quick profit at the expense of the rest of the market. As professional investors, the brothers clearly knew what they were doing was wrong. Fighting financial crime is a priority for the FCA. We will clamp down hard on those like the brothers who undermine the integrity of UK markets”.
The brothers will be sentenced on 3 July 2025 and face up to 7 years imprisonment.
Key takeaways
- Market abuse and preserving market integrity continues to be a top priority for the FCA;
- The FCA has implemented market surveillance tools which have greatly assisted the FCA in identifying potential instances of market abuse;
- For those firms that receive wall-crossing requests, the controls implemented should be commensurate to the respective inherent risk (i.e. implementing physical and technological separation between staff where possible, having a designated wall-crossing point of contact, PA Dealing approval process which includes reconciliations and cross-checking requests against internal documents such as the Restricted List); and
- Firms should consider revisiting the appropriateness of their market abuse risk assessments and determine whether any control enhancements are required in light of this enforcement case.
How can Cosegic help?
- Review your firms market abuse governance and control framework to ensure that it meets the regulatory requirements contained within UK MAR;
- Review your firms broader compliance governance and control framework, specifically the areas that are linked to market abuse such as PA Dealing; and
- Review and enhance your firms market abuse risk assessment.
Should you wish to discuss this enforcement case in more detail or how Cosegic can support your firm, please reach out to our in-house Market Abuse Expert, Daniel Chessher via [email protected].
