FCA drops probe into Bank of England ‘audio hack’

Michael Bowes QC advised Encoded Media on the FCA investigation into whether technology was misused by the company. This investigation was recently covered by the Financial Times.

Michael Bowes QC advised Encoded Media, a UK technology company, in respect of an FCA investigation into whether technology used by the company to broadcast comments at press conferences given by the then governor of the Bank of England, Mark Carney, was somehow misused because it allegedly allowed some traders to hear the comments up to eight seconds faster than rivals watching on slower television feeds. He was instructed by Andrew Wand of Capstick Dale.

Michael Bowes QC advised the company that its broadcasting of information given at a press conference did not amount to insider dealing or a breach of the Market Abuse Regulation. The company contended that its actions were wholly proper and the Bank of England’s concerns were based on a misunderstanding of the methods used to broadcast the information.

His opinion was submitted to the FCA in support of the company’s explanation that it had done nothing wrong.  A short form of his opinion was posted on the company’s website, in order to assist with the company’s explanation to its customers, following media coverage of the BoE’s apparent concerns.

On 23 September 2020, the FCA The Financial Conduct Authority said it had closed its probe into Encoded Media without taking further action. “We have examined these matters fully. We do not believe the audio feed contained any inside information, nor have we found any activity of concern or misconduct”.

The FT, in an article published today (24th September 2020), quoted an extract from Michael Bowes QC’s opinion:

“Once official investigations started, Encoded sought an opinion from Michael Bowes QC, of Outer Temple Chambers in London, who concluded the feed did not facilitate insider trading because “it is self-evident that information communicated at a press conference is made public at the moment of communication”.

The full article on the FT website can be read here.

About the author

Michael Bowes QC specialises in business crime, civil fraud, financial services and international sanctions. He acts for corporate clients and senior managers in global investigations and for the SFO, FCA, CMA and Lloyd’s of London. He is instructed in several current major financial cases, both civil and criminal and in several substantial cross-border corruption investigations.

Michael is highly regarded as an expert in civil and criminal “cross-over” work. He is described as “…one of the go-to barristers in England for a corporate crisis. He has a very practical approach to solving some of the more complicated problems.” “A great crossover practitioner from the Criminal Bar.” Chambers and Partners 2020.

Find out more

If you would like to discuss any of the issues covered in this article please contact Michael directly or via his practice management team; David Smith on +44 (0)20 7427 4905 or Colin Bunyan on +44 (0)20 7427 4886.

News 24 Sep, 2020