FCA backed in dispute over Aviva shares

FCA backed in dispute over Aviva shares

The Complaints Commissioner has thrown out a complaint against the FCA by someone who claimed to have lost money as a result of the regulator’s pre-briefing of the Daily Telegraph.

Last year the FCA carried out a review after the regulator briefed a Telegraph journalist that its business plan for 2014/2015 would include an inquiry into 30m insurance policies.

This led to millions of pounds being wiped off the share value of insurance companies.

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The person who complained to the Complaints Commissioner sold 1,041 Aviva shares at 8.08am on 28 March 2014 – the day after the article was published – for £4,888.40.

The complainant said the loss they suffered as a result of the sale of these shares was £4,720.

This is made up from the loss of dividends they would have been entitled to over 2014/15 from their holding of 7,030 shares and the loss they incurred in share price growth since they no longer hold any Aviva shares.

But the FCA offered an ex-gratia payment of £18.33 plus brokerage fees for the 1,041 shares sold on 28 March, using the share price of Aviva at close of business on that day as a benchmark against which to calculate investor losses.

But Antony Townsend, the complaints commissioner, said: “My task is to assess whether or not the decision is one which the regulator could reasonably have taken, in light of its statutory duties and policies, and bearing in mind that – save in very limited circumstances – the FCA is immune in law from actions for damages.

“In the circumstances above, choosing a benchmark for the purposes of calculating losses within a short range of the FCA clarification announcement at 2.30pm on 28 March 2014 is a decision which the regulator reasonably took.

“Compensating you for future dividend losses and share price fluctuations beyond the short window of dates discussed above would not, in my opinion, represent a reasonable course of action.”

Mr Townsend said share prices in affected companies, including Aviva, responded favourably to the FCA’s later clarification at 2.30pm, and recovered significantly by close of business on 28 March 2014.

Right to reply

The FCA declined to comment.