The jury in the case of R v Rigby, Bailey and Rowley at Southwark Crown Court has convicted:
-Carl Rigby, 43, on one count of recklessly making a statement to the market which was misleading, false or deceptive in a material particular, contrary to Section 397 (1)(c) of the Financial Services and Markets Act 2000 (FSMA)
On Tuesday 16 August, the jury convicted:
- Gareth Bailey, 36, on one count of recklessly making a statement, promise or forecast which was misleading, false or deceptive in a material particular, contrary to Section 397(1)(c) of the FSMA 2000.
and acquitted:
- Alistair Rowley, 43, on all counts.
Margaret Cole, FSA director of enforcement, said:
"This case demonstrates the FSA's willingness and capability to take all necessary action in pursuit of its objective of maintaining market confidence, including prosecuting criminal charges against individuals where appropriate."
The individuals were charged with one count of making a statement to the market knowing it to be misleading, false or deceptive in a material particular, under s.397 (1)(a) of FSMA and with one count of recklessly making a statement to the market which was misleading false or deceptive in a material particular contrary to Section 397(1)(c) of FSMA
Sentencing for Carl Rigby and Gareth Bailey will take place on 7 October 2005.
On 2 May 2002 AIT directors Carl Rigby and Gareth Bailey recklessly issued a statement via RNS that was misleading, false and deceptive in that it stated that both turnover and profit were in line with expectations.
The forecasted profit of £6.7m depended on the inclusion of the revenue from three contracts in the 31 March 2002 year end results:
1. Centraal Beheer £1.1m
2. Datapoint £2.5m
3. St James's Place £1.2m
The announcement of 2 May 2002 was rendered misleading, false and deceptive because these contracts did not exist.
On 31 May 2002 an update was issued stating that the 2 May 2002 statement was no longer accurate because a contract (Centraal Beheer) had not been confirmed, leading to a £1.1m shortfall on revenue and profit. It also noted that short term cash requirements were unlikely to be covered by AIT's available borrowing facilities and other cash resources. The statement caused the share price to fall from 492.5p to 96.5p
On 13 June 2002 a further statement was issued announcing that AIT would not publish preliminary results that day, as was previously expected, because of issues that had arisen in the company's audit. It said that there would be a further shortfall in revenue and profit, partly because the company had failed to satisfy itself that the value of a license agreement (Datapoint) worth £2.5m could be recognised in the year end results. The share price fell again from 105p to 38.5p
