Mr Bonnier made twelve inaccurate notifications to Regus plc (Regus), from 18 November 2002 to 8 January 2003, relating to dealings in Regus' shares. The notifications purported to show that Indigo had shareholdings in Regus, in fact Indigo mainly held contracts for difference (CFDs) referenced to Regus' shares and not Regus shares. The notifications were subsequently announced to the market by Regus.
Andrew Procter, Director of Enforcement at the FSA, said:
"The repeated actions of Mr Bonnier, an experienced market practitioner, and Indigo's failure adequately to oversee his activities, fall far short of the standards the FSA expects.
"The smooth operation of the financial markets relies on the provision of accurate information to enable participants to make reasoned investment decisions about a company's shares. The announcements made by Regus, which were based exclusively on the notifications made by Mr Bonnier, were a substantive source of information for the market in Regus' shares. In providing inaccurate information Mr Bonnier created a false and misleading impression as to the supply of, demand for, or the price or value of Regus' shares.
"Investors need to have confidence in the integrity of the processes by which shares are traded on the market and that information disclosed to the market is accurate."
Bonnier and Indigo's Actions
Mr Bonnier was a managing partner of Indigo with sole responsibility for Indigo's proprietary investment including compliance with statutory reporting requirements.
Mr Bonnier, on Indigo's behalf, traded in Regus' shares and CFDs referenced to Regus' shares. The majority of the CFD purchases during the period covered were made from Cantor Fitzgerald Europe Limited (Cantors) whose standard terms of business for CFDs meant that Cantors retained ownership, including voting rights, of all shares bought to hedge its CFD position.
During this period Mr Bonnier made 12 inaccurate notifications to Regus informing them that Indigo had bought Regus' shares. The notifications indicated that Indigo's shareholding in Regus was steadily increasing, ranging from 3.51% on 18 November 2002 to 15.12% on 6 January 2003 with a final holding of 12.8% notified on 8 January 2003. In fact the notifications related to the size of Indigo's CFD holdings and not actual shares. Regus in turn disclosed the notifications to the market as required under Listing Rule 9.11. However, during the relevant period Indigo's shareholding in Regus continually decreased and never amounted to more than 2.30% and on 8 January 2003 was nil.
The Panel on Takeovers and Mergers (Panel) had a number of discussions with Mr Bonnier and Indigo between 3 January and 9 January 2003 in relation to apparent stake building by Indigo in Regus. This resulted in Indigo, at the Panel's request, issuing on 7 January 2003 a statement that it was exploring a number of options with Regus' board, including a possible takeover.
Indigo was again asked on 9 January 2003, by the Panel, to make a statement clarifying its own position in relation to Regus. This statement confirmed that Indigo had a beneficial interest in 0.12% of the issued share capital of Regus; in fact Indigo's actual shareholding at this time was nil.
Mr Bonnier's behaviour was serious in that:
- inaccurate notifications were made on 12 occasions;
- the notifications were misleading to the market and they did not accurately state the number of shares held; and
- at no time during this period did Mr Bonnier adequately clarify the nature of Indigo's interest in Regus' shares, even when requested to do so by Regus' registrar on 13 December 2002.
