FCA orders listed company to compensate investors following market abuse

Posted on March 31, 2017
Archive : March 2017
Category : Financial Conduct Authority News

The Financial Conduct Authority (FCA) has ordered that Tesco plc and Tesco Stores Limited (together, Tesco) pay compensation to certain Tesco shareholders and bondholders following the FCA's finding that they committed market abuse in relation to a trading update published in August 2014. 

On 29 August 2014, Tesco plc published, via a regulatory information service, a trading update which contained a statement as to its expected trading profit for half-year period just ended (the August trading update).  In producing that update, Tesco plc relied on information provided to it by its wholly-owned subsidiary, Tesco Stores Limited, which was not correct.  On 22 September 2014, Tesco plc published a further trading update in which it announced that it had “identified an overstatement of its expected profit for the half year, principally due to the accelerated recognition of commercial income and delayed accrual of costs.”

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