Misleading statements under the Financial Services Act 2012
Misleading statements under the Financial Services Act 2012

The following Corporate Crime guidance note provides comprehensive and up to date legal information covering:

  • Misleading statements under the Financial Services Act 2012
  • Offences relating to financial services
  • Misleading statements—elements of the offence (the criminal act)
  • Mental element required for the offence of misleading statements
  • Changes with the new offences under section 89
  • Jurisdiction
  • Statutory defences to offence of misleading statements
  • Sentencing for offence of misleading statements

Offences relating to financial services

The Financial Services Act 2012 creates three offences relating to market manipulation where formerly under section 397 of the Financial Services and Markets Act 2000 (FSMA 2000) there were only two of misleading statements and misleading practices. Following the commencement of the FSA 2012 on 1 April 2013 the section 397 offences are repealed. The new offences created by FSA 2012 are:

  1. misleading statements under s 89

  2. misleading impressions under s 90, and

  3. misleading statements etc in relation to benchmarks under s 91

This note will cover the offence of misleading statements. See also Practice Notes:Misleading statements etc in relation to benchmarks and Misleading impressions under Financial Services Act 2012.

For information on the previous regime for market manipulation under section 397 of FSMA 2000, see Practice Note: Misleading the market and market manipulation under s 397 FSMA 2000 [Archived].

Misleading statements—elements of the offence (the criminal act)

A person commits an offence of misleading statements if he or she makes a statement or conceals the facts with the intention of inducing, or is reckless as to whether making it or concealing them may induce, another person:

  1. to enter into or offer to enter into, or to refrain from entering or offering to enter into, a relevant agreement, or

  2. to exercise, or refrain from