Overview

The Court of Appeal decision in the case of Winterflood Securities Limited and ors v Financial Services Authority on 22 April 2010 marks not only a success for the FSA but also demonstrates today's harsher regulatory environment.

Background
Winterflood was a market maker in the shares of an AIM-listed company called Fundamental-E Investments (FEI). In its role as market maker, Winterflood entered into a large number of trades in FEI shares during 2003 and 2004. These transactions were part of a share ramping scheme operated by a third party. Winterflood was not a knowing participant in the share ramping scheme, although its involvement as market maker was critical to its success.

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