The Financial Conduct Authority (FCA) has commenced civil proceedings against the former CEO and CFO of Globo Plc for alleged market abuse.
The FCA alleges the former CEO, Mr Konstantinos Papadimitrakopoulos, and former CFO, Mr Dimitris Gryparis, made misleading statements that caused the company’s shares to be traded significantly above their true value before the company’s total collapse in November 2015. The FCA is seeking compensation for investors whom the FCA claim were adversely impacted by the alleged misleading statements.
The FCA obtained European Arrest Warrants for both defendants who reside in Greece and sought to extradite them to face criminal charges. However, in June and September 2019, the Hellenic Court of Appeal denied the UK’s extradition request. The FCA has since commenced the civil proceedings in the High Court and the FCA’s criminal case in the UK against Mr Papadimitrakopoulos and Mr Gryparis remains live.
In a judgment handed down today, the High Court rejected an attempt by Mr Papadimitrakopoulos to strike out the FCA’s civil proceedings. He had argued that the FCA made unlawful use of evidence obtained from Greece and other jurisdictions under criminal mutual legal assistance processes.
In rejecting Mr Papadimitrakopoulos’s application to strike out the civil proceedings, the High Court ruled that certain evidence had not been obtained for the purpose of the civil proceedings and has indicated that it may require the FCA to obtain consent from the Greek authorities concerning a part of the FCA’s evidence.
The Court found that the use of this evidence for the purposes of civil proceedings was mistaken and, though not intentional and despite the FCA acting in good faith, it constituted an abuse of process. However, the Court ruled the circumstances did not justify the FCA’s proceedings being struck out and the case remains on foot. While some of the evidence obtained by the FCA cannot be used in the civil proceedings, the FCA considers this will not impact its prospects in the case.