FSA wins market abuse conviction

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The Independent Online

The Financial Services Authority secured its first criminal conviction for market abuse yesterday, when Gareth Bailey, the former finance director of the software company AIT, was found guilty of making a misleading stock market announcement three years ago.

The jury at Southwark Crown Court in London delivered a guilty verdict against Mr Bailey on the count of "recklessly making a statement, promise or forecast which was misleading, false or deceptive in a material particular to Section 397 (1) of the Financial Services & Markets Act 2000". He was cleared of one other charge. Alistair Rowley, the company's sales director, was cleared of both charges. The jury said it had not yet reached a verdict on AIT's chief executive, Carl Rigby. Mr Bailey faces up to seven years in jail.

The trio had been accused of making a false announcementbased on three new business contracts the regulator alleged did not exist when the announcement was made. Several weeks later, the firm was forced to issue two profits warnings, conceding the new business had not been secured.