The first ever Financial Services & Markets Tribunal case concerning allegations of market abuse finally got underway yesterday, pitting the Financial Services Authority and its team of top QCs, against Paul "The Plumber" Davidson, who has been forced to represent himself because of lack of funds.
Mr Davidson, who is appealing against a £750,000 fine from the FSA, said he had so far managed to muster just one witness for his case, compared with the FSA's 19. However, he is also hoping to compel three other witnesses to give evidence on his behalf.
Although Mr Davidson is a multimillionaire - with a net worth of about £80m - his assets have been frozen by another court, which is dealing with a dispute between himself and Oystertec, the company he founded and subsequently floated three years ago. As a result, he is allowed to access only £1,000 a week, and has been unable to hire a lawyer to fight his case at the Tribunal.
The two other individuals involved in the Tribunal case - Nigel Howe, a stock broker, and Ashley Tatham from City Index - have also been fined for their involvement in the alleged market abuse.
It emerged yesterday, however, that Mr Howe had successfully appealed to reduce his fine from £300,000 to £50,000 due to his inability to pay. Mr Tatham is appealing against his fine, and is set to appear at a separate Tribunal hearing.
The case against Mr Davidson involves the placing of a spread bet two years ago linked to Cyprotex, a fledgling biotech company which was floating on AIM, and in which Mr Davidson was the largest shareholder. City Index, which took the bet from Mr Davidson, covered its position by taking out a "contract for difference" on the stock with Dresdner Kleinwort Wasserstein. DKW in turn covered its position by buying shares in Cyprotex.
The FSA alleges Mr Davidson took the spread bet knowing that DKW would be forced to take a position in the stock, ensuring that all the shares in Cyprotex were successfully sold before the float. However, Mr Davidson says he was unaware of the transaction.Reuse content