Jonathon Crook (pictured), partner in the Financial Services Dispute Resolution group at international law firm Eversheds, on the FSA’s decision to hand out it’s largest ever fine to an individual – GBP3 million – to Alberto Micalizzi…

This is the largest fine imposed by the FSA on an individual to date for breaching its rules where market abuse is not involved. A cursory analysis of the decision notice explains why. The FSA seems to have reached the view that Mr Micalizzi orchestrated a fraud in order to conceal from his investors the massive losses that were being incurred by his hedge fund following the collapse of Lehman in the last quarter of 2008. The FSA is not a fraud prosecutor and has therefore taken steps to discipline Micalizzi in accordance with its statutory powers. But it all rather begs the question why Micalizzi was not prosecuted for fraud by the SFO, because this has all the hallmarks of a classic Ponzi-type scam. 



It is another good result for the FSA, but people will rightly ask why Mr Micalizzi is not going to jail. Interestingly, Mr Micalizzi has decided to “roll the dice” by referring the FSA’s decision to the Upper Tribunal. It will probably be at least a year before the Tribunal rules on the case, but this looks like a slam-dunk for the FSA. It will be interesting to see whether the Tribunal shows any inclination to increase Mr Micalizzi’s fine, if it decides that the reference was wholly unmeritorious. If it doesn’t do so in this case, it is unlikely that it ever will.”