MercoPress. South Atlantic News Agency
Falklands' politician fined by UK's market watchdog
Clifton: “FSA have accepted that my conduct was not deliberate” Speaker for the Falkland Islands' Legislative Assembly, Darwin Lewis Clifton OBE, has been fined by Britain's Financial Services Authority (FSA) for dealing in oil shares on the basis of inside information. However, FSA described Mr. Clifton's conduct as “non deliberate” and said his full cooperation with the investigation had qualified him for a 30% fine reduction.
Mr. Clifton, a director of two companies linked to the Falklands (AIM quoted Desire Petroleum plc and Byron Holdings), and a former London Representative for the Falklands, was fined £59,500 after being found guilty by the City watchdog of market abuse on several occasions between November 2007 and February 2008. Byron Holdings, a separate company in which Mr. Clifton was a director, was also fined £86,030 for buying shares in Desire, set up to explore for oil and gas in the Islands. Mr Clifton, who resigned Wednesday both as a non executive director of Desire and as Speaker of the House was twice elected to the Island's Legislative and Executive councils and has been the speaker for the Falkland Islands Legislative Assembly since 2006. In a statement from the Members of the Legislative Assembly today it was stated that they had, "received and accepted the resignation of Lewis Clifton as Speaker of the House. Arrangements for the appointment of a new Speaker will be put in place shortly. "In view of recently published details concerning fines levied on Mr. Clifton and Byron Holdings by the UK Financial Services Authority, Mr. Clifton advised Members that he felt a moral duty to resign as Speaker. "Whilst acknowledging that the actions which led to the FSA penalties were in no way connected with his public duties as Speaker, the Assembly accepts his resignation is the correct action in order to maintain the integrity and good reputation of the House and the Falkland Islands Government. "The Assembly thanks Mr. Clifton for his service to the community." Mr. Clifton told MercoPress: "I can confirm the FSA have levied financial penalties against myself and Byron Holdings Limited (Byron) in relation to the purchase of shares by Byron in Desire Petroleum plc (Desire) in 2007 and 2008. The purchases took place at a time I was a non executive director of Desire and during a period when Byron should not have dealt in Desire shares. I regret that I failed to apprise myself fully of the dealing restrictions applying to a Director in my position and I accept that my conduct fell short of the standard to be expected of a director of an AIM listed company. "The FSA have accepted that my conduct was not deliberate and that I did not seek to conceal Byron's purchases having disclosed them to the Chairman of Desire, without prompting, in February 2008. I have co-operated fully with the FSA investigation." According to the Times Olinethe FSA said Mr Clifton became aware by November 19, 2007 that Desire was in advanced talks with a third party over a joint venture drilling project. On four separate occasions between then and February 8 last year, Mr. Clifton directed Byron to buy shares in Desire, in contravention of market rules, the FSA said. Byron bought a total of 440,000 shares for £118,570, sitting on a profit once the discussions over the joint venture had been disclosed to the wider market of £86,030, The fine effectively wipes out Byron's profits on the trades. At the same time, the FSA noted that Byron was a long-term shareholder and did not sell any of the shares. Mr. Clifton was the founding director of Desire, a company set up in 1996 to explore for oil and gas in the Falklands. He was been a non-executive director of Desire, listed on the AIM market since May 2005. He is also a director and shareholder of Byron, a trading company incorporated in the Falklands. Margaret Cole, FSA director of enforcement said "Mr. Clifton held a position of trust as a non-executive director of Desire, but he fell short of the high standards expected of someone in that position. Senior people at publicly quoted companies should ensure that they understand when material is inside information and do not trade when they have it. If they fail to do this they can expect the FSA to impose substantial financial or other sanctions, even where they have not deliberately set out to commit market abuse." Ms Cole added that in determining the financial penalty, "the FSA took into account the fact that Mr Clifton's conduct was not deliberate; he cooperated fully with the FSA investigation and settled at an early stage of the investigation. In doing so, he qualified for a 30% reduction to his fine which would have otherwise been £85,000". She also mentioned that whilst Byron had been pursuing the strategy of increasing its Desire shareholding over the long-term, "the inside information was a material influence on the timing of its share purchases". But Byron has not sold the shares. By Lisa Johnson - SeAled PR - Stanley
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