FSA successfully prosecutes former FD of software company for misleading shareholders
The former finance director of call centre software company AIT is facing a
possible jail term after being found guilty of one count of misleading
Gareth Bailey, 36, became the first person to be convicted of criminal market
abuse under the Financial Services and Markets Act 2000.
According to The Guardian, during his prosecution by the Financial
Services Authority, lawyers claimed the statement relied on revenues from three
contracts, worth £4.8m, that had not been subject to binding agreements.
After the contracts fell through, AIT issued two profit warnings, its shares
collapsed and £90m was wiped from the value of the company.
Although Bailey was found guilty on one count of recklessly making a
misleading statement to the stock exchange, he was acquitted on a more serious
count of knowingly making the misleading statement.
His crime carries a maximum jail sentence of seven years. He has been ordered
to surrender his passport pending sentencing on 7 October.