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On 28 March 2017, the FCA issued a Final Notice finding that Tesco Plc and Tesco Stores Ltd had committed market abuse by publishing a trading update which gave a false or misleading impression of Tesco Plc’s share and bond prices, by virtue of overstating its expected profits due to acceleration of commercial income and delayed accrual of costs.

In a landmark approach to compensation, the FCA exercised for the first time its power under section 384 of FSMA to require a listed company to make restitution to affected investors for the market abuse, imposing by agreement a compensation scheme with an estimated value of some £85 million.   In view of the simultaneous agreement of a Deferred Prosecution Agreement with the SFO involving a fine of £129 million, the FCA did not impose a penalty for market abuse. 

Javan Herberg QC and Daniel Burgess acted for the FCA.

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