The FCA has recently published a Decision Notice in respect of Banque Havilland SA (Banque Havilland) in which the FCA found that Banque Havilland acted without integrity in breach of Principle 1 of the FCA’s Principles of Business in producing and disseminating to an employee of an Abu Dhabi sovereign wealth fund a presentation which contained improper advice for potential investors by recommending manipulative trading strategies, including recommending conduct which could be a criminal offence had it taken place in the UK (the Presentation). Decisions have also been made in respect of the bank’s former London branch CEO, a former senior manager and a former employee.  References have been made to the Upper Tribunal, including by Banque Havilland. A summary of the Banque Havilland Decision Notice published by the FCA is set out below.


In June 2017, a coalition of Gulf states (including the United Arab Emirates) severed diplomatic relations with Qatar on the basis of Qatar’s alleged support for terrorism. Between September and November 2017, Banque Havilland created and sent to the Abu Dhabi sovereign wealth fund a presentation which included a strategy which aimed to devalue the Qatari Riyal, put pressure on its currency peg with the US Dollar and harm the economy of Qatar (the Presentation).  

The strategy in the Presentation included:

  • building up a portfolio of specific Qatari debt without attracting attention by parties acting in concert in a series of wash trades;
  • later dumping the position in order to create a false impression in the market of a flight from Qatari debt;
  • opening a credit default swap position on the debt and then dumping that debt to drive the price down;
  • increasing and closing the credit default swap position in order to add negative pressure, to profit from the manipulative bond trading, and increasingly stressed markets; and
  • using a PR campaign deliberately magnifying the false impression to increase selling of the Qatari Riyal or Qatari bond holdings and encouraging other market participants to do likewise.


The FCA considered that the Presentation contemplated manipulative trading which aimed to create a false or misleading impression as to the market in or the price of Qatari bonds which, if conducted in the UK, could amount to a criminal offence. The FCA also considered that the strategy included regulated advice (pursuant to article 53 of the Regulated Activities Order and section 22(1) of the Financial Services and Markets Act 2000 (FSMA)) which was aimed at the UAE and/or other states in the Middle East region because it advised those potential investors to transfer their existing holdings of Qatari bonds into a “protected cell company” to “preserve integrity” before the manipulative trading intended to destabilise the Qatari economy took place.

The FCA concluded that Banque Havilland had breached Principle 1 which requires a firm to conduct its business with integrity and that a fine of £10m should be imposed, finding that Banque Havilland’s conduct amounted to “level 5” seriousness.

Banque Havilland made a number of (unsuccessful) representations to the Regulatory Decisions Committee of the FCA, including that:

  • the Presentation was not regulated advice pursuant to section 22 of FSMA on the basis that the Presentation was not given to anyone and was not intended to be given to an investor or potential investor (as neither the Abu Dhabi sovereign wealth fund nor its representative were investors or potential investors) and that the Presentation did not contain any recommendations to buy or sell investments and did not contain advice in respect of a “particular investment”;
  • the Presentation was not created or sent by any person doing an act for and on behalf of Banque Havilland;
  • the strategy as set out in the Presentation was implausible, on the basis that the size and scale of the operation made the conduct outlined in the Presentation beyond the resources of Banque Havilland, the Presentation was not reviewed by Banque Havilland’s centralised risk and compliance systems and was not subject to its product approval process, and the Presentation was “wholly unrealistic and amateur”, containing no Banque Havilland branding and was a draft;
  • the FCA Enforcement team investigating the matter acted unfairly in terms of carrying out an unduly limited investigation; and
  • that the penalty imposed was not appropriate for a number of reasons, including that the conduct should have been “level 4” seriousness and that there had been exceptional cooperation by Banque Havilland.

In addition to the Decision Notice in respect of Banque Havilland, the FCA also issued Decision Notices against three individuals involved with the Presentation, being the former CEO of the London branch of Banque Havilland, the Head of Asset Management and a senior investment analyst. The FCA decided that all three had breached Individual Conduct Rule 1 (integrity) and that they should be fined and prohibited from performing any functions in respect of regulated activities.

Banque Havilland, the former CEO and the senior investment analyst have all referred their notices to the Upper Tribunal. The Head of Asset Management, who was a senior manager (and SMF 21), is the only party not to have made a reference to the Upper Tribunal but his Decision Notice, and that in respect of Banque Havilland and the other individuals, has been referred to the Upper Tribunal by the father of the former CEO (who was the ultimate controller of the firm) who was identified and prejudiced in all the Decision Notices and so has been given third party rights.