The High Court has confirmed a Central Bank assessment that Philip Lynch committed two suspected contraventions of market abuse rules by buying C&C Group shares while in possession of inside information. It also confirmed sanctions including a €75,000 penalty and a five-year disqualification from involvement in regulated financial service providers.
The application was brought under Regulation 44 of the Market Abuse Regulations 2005, which allows the Bank to ask the court to confirm an adverse assessment where no appeal has been lodged. Lynch did not oppose the application. The court refused his request for the matter to be heard in private, and dealt with the application on an uncontested basis.
The suspected contraventions concerned purchases on 21 October 2008: 150,000 C&C shares at about 11.12am and 50,000 at about 12.30pm, both for the account of Lynch’s approved retirement fund. In its earlier assessment, the Central Bank’s assessors found beyond a reasonable doubt that Lynch possessed inside information when he bought the shares. Under the assessors’ ruling, use of the information was presumed once possession and acquisition were established. Lynch gave no evidence to rebut that presumption.
The assessors issued their adverse assessment in January 2022. The sanctions specified were a public caution, a €75,000 monetary penalty, five years’ disqualification from being concerned in the management of, or having a qualified holding in, any regulated financial service provider, and a direction to pay €37,500 towards the Bank’s assessment costs. Lynch’s solicitors said in February 2022 that he did not intend to appeal.
The court said it had to satisfy itself that the assessment process complied with prescribed procedures and natural and constitutional justice, and consider whether the sanctions were proportionate. It found that Lynch had been represented and given opportunities to make submissions, and that the assessment complied with Regulation 35. It also noted that the assessors considered the seriousness of the conduct, its potential effect on market integrity and investor confidence, deterrence, and mitigating circumstances. These included Lynch’s cooperation, his age, retirement from market activity, and reported health issues.
The judge concluded there was no basis to set aside the assessment and that the sanctions were proportionate. The order confirmed both the adverse assessment and all specified sanctions. They take effect on the date the court order is perfected. The judgment does not state the amount of any gains made or losses avoided.