Pages 2

Breach of s 47(2) will amount to a criminal offence. A person found guilty of such an offence can be liable, on conviction on indictment, to imprisonment for a term not exceeding seven years or to a fine or to both.142 On summary conviction, the maximum penalties are imprisonment for a term not exceeding six months or a fine or both.143 No civil sanction of contract unenforceability is expressly provided for under s 47;144 nor is a civil claim available to a private investor who might have suffered loss by virtue of s 62 of the Financial Services Act 1986.145 However, the fitness and properness of an authorised person, found guilty of an offence under s 47, to continue to engage in investment business would clearly be in question and would presumably be reviewed by the relevant regulator. It should also be noted that, under s 61 of the Financial Services Act 1986,146 an



application could be made to the court to prevent, or for a restitution order relating to profits accruing from, a breach of s 47.148

The context in which the separate offence of ‘market manipulation’ may be committed is where a person does any act or engages in any course of conduct which creates a false or misleading impression as to the market in, the price or the value of any investments. The offence will be committed if the person does so for the purpose of creating that false or misleading impression and of thereby inducing another person to acquire, dispose of, subscribe for or underwrite the investments in question or to refrain from doing so or to exercise or refrain from exercising any rights conferred by those investments.149