Final Notice
On , the Financial Conduct Authority issued a Final Notice to Mr András Sebők
1
FINAL NOTICE
1
ACTION
1.1
For the reasons given in this Final Notice, the Authority hereby imposes on Mr
Sebők a financial penalty of £123,500 for breaching Articles 19(1) and 19(11) of
the Market Abuse Regulations (596/2014) (“MAR”).
1.2
Mr Sebők agreed to resolve this matter and qualified for a 30% discount under
the Authority’s executive settlement procedures. Were it not for this discount, the
Authority would have imposed a financial penalty of £176,400.
2
SUMMARY OF REASONS
2.1
Wizz Air Holdings plc (“Wizz Air”) is listed on the main market of the London Stock
Exchange. Mr Sebők commenced employment with Wizz Air in 2004 and was
promoted to the role of Chief Supply Chain Officer on 1 April 2019. On assuming
this role, Mr Sebők, a senior employee at Wizz Air, became a member of the Wizz
Air Leadership Team.
2.2
As a senior executive at Wizz Air, with regular access to confidential information
containing inside information and the power to make managerial decisions
affecting Wizz Air’s future development and business prospects, Mr Sebők was a
person discharging managerial responsibilities (“PDMR”) as defined under Article
3(1)(25)(b) of MAR.
2.3
Article 19(1) of MAR requires a PDMR of an issuer to notify the issuer and the
Authority of transactions in the issuer’s shares within three business days of any
such transactions. Between 4 April 2019 and 6 November 2020 (the “Relevant
Period”), Mr Sebők, as a PDMR, breached Article 19(1) of MAR by failing to notify
Wizz Air and the Authority of 115 transactions in Wizz Air shares (“PDMR Trades”)
within three business days, or at all. The net result of the PDMR Trades was that
Mr Sebők sold the entirety of his holding in Wizz Air shares which, as at 4 April
2019, stood at 14,700 shares valued at £454,377.
2.4
Article 19(11) of MAR sets out restrictions on Mr Sebők’s ability to transact in
shares of Wizz Air as a PDMR. Specifically, it restricted him from transacting in
shares of Wizz Air during a closed period of 30 calendar days before the
announcement of Wizz Air’s interim or year-end financial reports. Article 19(12)
of MAR permits transactions during such periods only if specifically authorised by
Wizz Air in particular circumstances.
2.5
Mr Sebők breached Article 19(11) of MAR, whilst transacting in the PDMR Trades
during the Relevant Period, by trading during the closed period of Wizz Air’s
interim and year-end financial reports on 18 occasions in respect of four half-year
and/or full year financial reports.
2.6
As a result of Mr Sebők’s failure to notify Wizz Air of the PDMR Trades, Wizz Air
was not able to announce the transactions to the market in a timely fashion in
accordance with Article 19(3) of MAR. Mr Sebők also failed to seek prior
authorisation from Wizz Air to trade, as required by Wizz Air’s internal policies,
which resulted in Wizz Air not being given the opportunity to approve or reject his
personal account dealing.
2.7
The prompt notification to issuers and the Authority of transactions in the shares
of the issuer conducted by PDMRs on their own account, or by persons closely
associated with them, provides a means for the Authority to supervise markets.
2.8
Article 19(3) of MAR requires issuers to announce PDMR notifications to the
market promptly and no later than three business days after the relevant
transaction. Hence, the prompt notification to the issuer and the Authority by
PDMRs is also valuable information for market participants.
3
2.9
The Article 19 MAR notification regime and restrictions on closed-period trading
are preventative measures against market abuse. They provide valuable timely
information to investors and ensure that PDMRs who often hold inside information
do not gain an unfair advantage in their trading activities. In addition, market
transparency is a prerequisite for the confidence of markets and of company’s
shareholders.
2.10
Failure by PDMRs to notify dealing transactions in the shares of their issuers and
unauthorised trading by PDMRs during closed periods undermines the Authority’s
strategic objective of ensuring that relevant markets function well, and its
operational objective of protecting and enhancing the integrity of the UK financial
system.
3
DEFINITIONS
3.1
The definitions below are used in this Final Notice:
“the Authority” means the Financial Conduct Authority.
“DEPP” is the Decision Procedures and Penalties Manual, which forms part of the
Authority’s Handbook.
“the Act” means the Financial Services and Markets Act 2000.
“MAR” means the Market Abuse Regulations.
“Mr Sebők” refers to the individual András Sebők.
“PDMR” means a person discharging managerial responsibilities, as defined in
Article 3(1)(25) of MAR.
“Relevant Period” means the period between 4 April 2019 and 6 November 2020
during which Mr Sebők breached Article 19(1) of MAR on 115 separate occasions
and Article 19(11) of MAR on 18 separate occasions.
“Share Dealing Code” refers to Wizz Air’s internal policy document entitled “Rules
on Share Dealings” dated 24 May 2016.
“the Tribunal” means the Upper Tribunal (Tax and Chancery Chamber).
“Wizz Air” means Wizz Air Holdings plc.
“WLT” means the Wizz Air Leadership Team.
4
FACTS AND MATTERS
Mr Sebők’s Role at Wizz Air
4.1
Mr Sebők joined Wizz Air as the Head of Treasury and Controlling in 2004. He was
promoted to the role of Chief Supply Chain Officer on 1 April 2019 at which time
he became a member of the WLT. During the Relevant Period, Mr Sebők was a
senior employee at Wizz Air, with his reporting line one step removed from the
Chief Executive Officer (i.e. his manager reported directly to the Chief Executive
Officer).
4.2
Upon his appointment as Chief Supply Chain Officer Mr Sebők agreed, in
consenting to the terms of his contract of employment, to adhere to his obligations
as a PDMR. These obligations included the requirement to notify Wizz Air of any
dealing in Wizz Air shares and to comply with applicable restrictions on share
dealing as set out within MAR and the Share Dealing Code. Throughout the
Relevant Period, Wizz Air sent emails to all PDMRs, including Mr Sebők, reminding
them of restrictions on trading during closed periods and the requirement to seek
Wizz Air’s authorisation for share trading at all other times.
4.3
Under Article 3(1)(25)(b) of MAR, a PDMR is a senior executive who has regular
access to inside information relating directly or indirectly to the issuer and power
to take managerial decisions affecting the future developments and business
prospects of the issuer.
4.4
Mr Sebők was a member of the WLT, which consisted of twelve members all with
senior positions at Wizz Air. These included the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer and other Chief of staff. Although Mr
Sebők was not a member of the Board of Wizz Air, as Chief Supply Chain Officer
and a member of the WLT, he regularly attended Board meetings and had access
to Wizz Air’s draft financial results announcements before they were made public.
Mr Sebők also attended monthly financial performance briefings which would
typically include a review of quarterly performance. Mr Sebők, by virtue of his
responsibilities as Chief Supply Chain Officer, also had access to confidential
information about a range of Wizz Air’s matters including aircraft purchase and
negotiation, general procurement activities, airport portfolio and financial
performance. This indicates that he had regular access to inside information.
4.5
The Authority considers that Mr Sebők was a PDMR for the purposes of MAR in
light of the facts above.
The PDMR requirements
4.6
On 3 July 2016, MAR came into effect. Article 19(1) of MAR requires PDMRs to
notify the Authority and the issuer of every transaction conducted on their own
account in their issuer’s shares, debt instruments, derivatives or other linked
financial instruments promptly and no later than three business days after the
transactions if the total amount of transactions per calendar year has reached
€5,000.
4.7
The issuer in turn must publicly announce that information promptly and no later
than within three business days after the transactions under Article 19(3) of MAR.
4.8
A PDMR is also prohibited from conducting transactions in the issuer’s securities
during a closed period of 30 calendar days before the announcement of an interim
financial or year–end report under Article 19(11) of MAR.
4.9
During the Relevant Period, Wizz Air’s Share Dealing Code set out the
circumstances and procedures under which directors, PDMRs and other employees
of the firm could trade in securities. These not only reflected, as a minimum, the
requirements of Article 19 of MAR but also imposed more stringent requirements.
Specifically, under the Share Dealing Code, PDMRs were obligated to comply with
the following requirements prior to trading:
4.9.1
they had to fill in a clearance form and send it to the Chief Corporate
Officer for approval; and
4.9.2
they could not execute the proposed transactions until clearance to deal
had been received.
4.10
The Share Dealing Code also set out provisions for PDMRs that covered the
requirements after trading. These stated that PDMRs must notify their dealings to
Wizz Air and the Authority by the end of the business day after the day in which
the dealing takes place. Wizz Air would then announce the dealing to the market.
4.11
During the Relevant Period Mr Sebők received, on multiple occasions, emails
which reminded him as to his obligations as a PDMR, referred him to the Share
Dealing Code and reminded him as to the commencement of closed periods.
4.12
The emails containing the reminders in respect of the Share Dealing Code and
PDMR obligations were sent to Mr Sebők and the other PDMRs by email on 1 April
2020 and 1 October 2020. With the exception of the emails on 1 April 2019 and
27 June 2019, all had the following documents attached as part of the Share
4.12.1 the Rules on Share Dealings, including in relation to the process for
obtaining clearance to deal and the subsequent notification of dealings;
4.12.2 the Acknowledgement Form for the Share Dealing Code;
4.12.3 the Clearance to Deal Form; and
4.12.4 the Notification of Dealing Form.
4.13
The Rules on Share Dealings required Mr Sebők to complete and return the form
“Acknowledgement of Share Dealing Code” to show that he had read and
understood his legal and regulatory obligations. The document invited him to
contact the Chief Corporate Officer should he have any questions.
4.14
In light of Mr Sebők’s senior position and responsibilities at Wizz Air, the Authority
considers that it would be reasonable to expect Mr Sebők to understand that the
emails, referenced at paragraph 4.12 above, contained important information,
relevant to a small group of senior individuals with positions of responsibility
within Wizz Air, and that he would be expected to pay close attention to them.
4.15
Mr Sebők also signed a contract of employment dated 1 April 2019 with Wizz Air
to formalise his appointment as Chief Supply Chain Officer. The contract of
employment contained a section entitled “Dealing in securities”, which required
Mr Sebők to adhere to the provisions of MAR as implemented by the Share Dealing
Code.
4.16
The Authority considers that it is reasonable to expect Mr Sebők, in his role as
Chief Supply Chain Officer, to read important documentation setting out his
regulatory obligations.
4.17
In light of the above, the Authority considers that Mr Sebők was on notice as to
his PDMR obligations.
7
The Trading
4.18
At the start of the Relevant Period, Mr Sebők’s holding in Wizz Air securities
amounted to 14,700 shares. During the Relevant Period, Mr Sebők executed 115
trades in Wizz Air’s securities which he failed to report in contravention of his
reporting obligations as a PDMR. These trades included both share sales and
purchases, amounting to a movement of 121,960 Wizz Air shares worth
£4,147,136.66, and ultimately resulted in Mr Sebők disposing of his entire holding
in Wizz Air shares.
4.19
The first trade of 2019 within the Relevant Period took place on 4 April 2019 and
resulted in the sale of 2,000 shares priced at £31.38 each. The first trade of 2020
within the Relevant Period took place on 10 January 2020 and resulted in the sale
of 1000 shares priced at £40.32 each. Both trades were individually valued greater
than €5,000, with the former equating to £62,760 and the latter equating to
£40,320, thereby exceeding the annual cumulative threshold of €5,000 set out in
Article 19(8) of MAR which triggers a PDMR’s obligation to notify their issuer and
the Authority. In both instances, and in all but one subsequent trade during the
Relevant Period, Mr Sebők failed to notify either Wizz Air or the Authority within
three business days of the trades’ execution, or at all, as required under Article
19(1) of MAR.
4.20
Out of the 115 transactions executed by Mr Sebők during the Relevant Period, 18
transactions additionally contravened Article 19(11) of MAR in that they occurred
during a closed period of 30 calendar days before the announcement of an interim
financial report or year-end report relating to Wizz Air. These 18 transactions
amounted to a movement of 17,900 shares worth £556,492.27 in Wizz Air
securities. They consisted of the following:
4.20.1 One transaction, in advance of Wizz Air’s two announcements on 31 May
2019 of its results for the 12 months to 31 March 2019, in which Mr Sebők
purchased 2,000 shares.
4.20.2 One transaction, in advance of Wizz Air’s announcement on 13 November
2019 of its results for the six months to 30 September 2019, in which Mr
Sebők sold 1,000 shares.
4.20.3 Twelve transactions, in advance of Wizz Air’s announcement on 3 June
2020 of its results for the 12 months to 31 March 2020, in which Mr Sebők
sold 6,000 shares and purchased 5,500 shares.
4.20.4 Four transactions, in advance of Wizz Air’s announcement on 5 November
2020 of its results for the six months to 30 September 2020, in which Mr
Sebők sold 2,400 shares and purchased 1,000 shares.
Notification of Share Dealings
4.21
Mr Sebők did not notify Wizz Air following the execution of any of the 115 trades
in Wizz Air securities during the Relevant Period, nor did he seek Wizz Air’s
authorisation for the 18 trades out of 115 which were executed within closed
periods prior to announcements of Wizz Air’s financial reports. Wizz Air was
informed of Mr Sebők’s trading by the Authority in September 2021 and
investigated the matter. Mr Sebők failed to provide Wizz Air with an explanation
for his conduct. As a result, Wizz Air terminated Mr Sebők’s employment with
immediate effect. Wizz Air then announced Mr Sebők’s trades to the market on
4.22
The Authority found that Mr Sebők sought Wizz Air’s authorisation to transact in
Wizz Air securities on one occasion during the Relevant Period on 28 August 2020,
followed by his duly notifying Wizz Air when this transaction had completed and
Wizz Air notifying the market on 1 September 2020. In this instance, Mr Sebők
followed the correct internal process, including sending a completed clearance
form to the Chief Corporate Officer, obtaining approval and then submitting a
completed notification form. The Authority has not counted this transaction within
the 115 transactions which he executed without notification. However, the
Authority considers this to demonstrate Mr Sebők’s awareness of the requirement
to notify Wizz Air.
5
FAILINGS
5.1
The statutory and regulatory provisions relevant to this Final Notice are referred
to in Appendix 2.
5.2
For the reasons set out below, the Authority considers that Mr Sebők breached
Article 19(1) of MAR on 115 occasions and Article 19(11) of MAR on 18 occasions
within the Relevant Period.
5.3
Mr Sebők was the Chief Supply Chain Officer and member of the WLT with regular
access to confidential information containing inside information in relation to Wizz
Air. Mr Sebők agreed, in signing his contract of employment as Chief Supply Chain
Officer, to adhere to his obligations as a PDMR to notify Wizz Air of any dealing in
Wizz Air shares and to comply with applicable restrictions on share dealing as set
out within MAR and the Share Dealing Code. He was periodically reminded by
email of his obligations as a PDMR throughout the Relevant Period.
5.4
Article 19(1) of MAR sets out what Mr Sebők was required to do as a PDMR when
dealing in shares in Wizz Air. Specifically, it required him to notify Wizz Air and
the Authority of transactions conducted on his own trading account in relation to
Wizz Air shares promptly and no later than three business days after the dates of
the relevant transactions.
5.5
During the Relevant Period, Mr Sebők failed to notify Wizz Air or the Authority of
115 transactions in Wizz Air shares, as set out in Appendix 1, promptly and no
later than within three business days of the relevant transactions. As a result,
Wizz Air was not able to announce the necessary PDMR notifications to the market
in accordance with Article 19(3) of MAR.
5.6
Article 19(11) of MAR sets out the periods during which Mr Sebők was prohibited
as a PDMR from any dealings in shares of Wizz Air. Specifically, it restricted him
from conducting transactions in shares of Wizz Air during a closed period of 30
calendar days before Wizz Air’s announcement of an interim financial report or
year-end report, which Wizz Air is required to make public according to the rules
of the London Stock Exchange or the laws of the United Kingdom.
5.7
On 18 separate occasions during the Relevant Period, Mr Sebők breached Article
19(11) of MAR by transacting in Wizz Air shares during multiple closed periods,
as set out at paragraphs 4.20.1 – 4.20.4.
6
SANCTION
6.1
The Authority’s policy for imposing a financial penalty is set out in Chapter 6 of
DEPP. In respect of conduct occurring on or after 6 March 2010, the Authority
applies a five-step framework to determine the appropriate level of financial
penalty. DEPP 6.5B sets out the details of the five-step framework that applies in
respect of financial penalties imposed on individuals in non-market abuse cases.
6.2
The total penalty that the Authority hereby imposes on Mr Sebők is £123,500. In
summary, this penalty is calculated as follows.
Step 1: disgorgement
6.3
Pursuant to DEPP 6.5B.1G, at Step 1 the Authority seeks to deprive an individual
of the financial benefit derived directly from the breach where it is practicable to
quantify this.
6.4
The Authority has not identified any personal financial benefit that Mr Sebők
derived directly from the breach.
6.5
Step 1 is therefore £0.
Step 2: the seriousness of the breach
6.6
Pursuant to DEPP 6.5B.2G, at Step 2 the Authority determines a figure that
reflects the seriousness of the breach. That figure is based on a percentage of
the individual’s relevant income. The individual’s relevant income is the gross
amount of all benefits received by the individual from the employment in
connection with which the breach occurred, and for the period of the breach.
6.7
Mr Sebők’s breaches of Article 19(1) and 19(11) of MAR are related to his
employment at Wizz Air during the Relevant Period. The Authority is of the view
that Mr Sebők received remuneration commensurate with his responsibilities and
so it is reasonable to base the amount of penalty on his remuneration. The
Authority has therefore determined a figure based on a percentage of Mr Sebők’s
relevant income during the period of the breaches.
6.8
The period in which Mr Sebők committed these breaches was from 4 April 2019
to 6 November 2020. Mr Sebők’s relevant income for this period was £588,132.45.
6.9
In deciding on the percentage of the relevant income that forms the basis of the
Step 2 figure, the Authority considers the seriousness of the breach and chooses
a percentage between 0% and 40%. This range is divided into five fixed levels
which represent, on a sliding scale, the seriousness of the breach; the more
serious the breach, the higher the level. For penalties imposed on individuals there
are the following five levels:
Level 1 – 0%
Level 2 – 10%
Level 3 – 20%
Level 4 – 30%
Level 5 – 40%
6.10
In assessing the seriousness level, the Authority takes into account various factors
which reflect the impact and nature of the breach, and whether it was committed
deliberately or recklessly.
6.11
DEPP 6.5B.2G(12) lists factors likely to be considered ‘level 4 or 5 factors’. Of
these, the Authority finds the following factors to be relevant:
6.11.1 Mr Sebők received emails reminding him as to his PDMR obligations on
no less than seven occasions during the Relevant Period;
6.11.2 Mr Sebők demonstrated his awareness of the process (and therefore the
requirement) to obtain Wizz Air’s approval prior to transacting in its
shares and to notify Wizz Air thereafter; and
6.11.3 therefore, the Authority considers that Mr Sebők committed the breaches
deliberately or recklessly.
6.12
DEPP 6.5B.2G(13) lists factors likely to be considered ‘level 1, 2 or 3 factors’. Of
these, the Authority finds the following factors to be relevant:
6.12.1 There is no evidence that any of Mr Sebők’s breaches had a material
adverse impact on the market or significantly impacted Wizz Air’s share
price.
6.13
The Authority also finds that the following factors are relevant to the nature and
impact of the breaches:
6.13.1 Mr Sebők was a member of WLT;
6.13.2 Mr Sebők was not an authorised person;
6.13.3 although Mr Sebők was properly informed and received frequent
reminders setting out his PDMR responsibilities arising from MAR, he was
not provided with any individual training on MAR and his responsibilities
as a PDMR;
6.13.4 Mr Sebők’s breaches were repeated across a large number of occasions;
and
6.13.5 Mr Sebők’s failure to notify Wizz Air ultimately meant that Wizz Air was
unable to notify the market of the PDMR transactions in the usual way.
6.14
Taking all of these factors into account, the Authority considers the seriousness
of the breach to be level 4 and so the Step 2 figure is 30% of £588,132.45.
6.15
Step 2 is therefore £176,439.74.
Step 3: Mitigating and aggravating factors
6.16
Pursuant to DEPP 6.5B.3G, at Step 3 the Authority may increase or decrease the
amount of the financial penalty arrived at after Step 2, but not including any
amount to be disgorged as set out in Step 1, to take into account factors which
aggravate or mitigate the breach.
6.17
The Authority considers that the following factors aggravate the breach:
6.17.1 in the months prior to MAR coming into force, the Authority and other
agencies published a large volume of materials relating to the
implementation of MAR, including the obligations of PDMRs, and such
materials were widely accessible.
6.18
The Authority considers that the following factors mitigate the breach:
6.18.1 Mr Sebők has not been subject to any prior disciplinary action by the
Authority.
6.19
Having taken into account the factors above, the Authority does not find it
necessary to make any adjustment for Step 3.
6.20
Step 3 is therefore £176,439.74.
Step 4: adjustment for deterrence
6.21
Pursuant to DEPP 6.5B.4G, if the Authority considers the figure arrived at after
Step 3 is insufficient to deter the individual who committed the breach, or others,
from committing further or similar breaches, then the Authority may increase the
penalty.
6.22
The Authority considers that the Step 3 figure of £176,439.74 represents a
sufficient deterrent to Mr Sebők and others, and so has not increased the penalty
at Step 4. Step 4 is therefore £176,439.74.
Step 5: settlement discount
6.23
Pursuant to DEPP 6.5B.5G, if the Authority and the individual on whom a penalty
is to be imposed agree the amount of the financial penalty and other terms, DEPP
6.7 provides that the amount of the financial penalty which might otherwise have
been payable will be reduced to reflect the stage at which the Authority and the
individual reached agreement. The settlement discount does not apply to the
disgorgement of any benefit calculated at Step 1.
6.24
The Authority and Mr Sebők reached a settlement agreement and so a 30%
discount applies to the Step 4 figure.
6.25
The Authority has rounded down the final penalty to the nearest £100. Step 5 is
therefore £123,500.
6.26
The Authority therefore hereby imposes a total financial penalty of £123,500 on
Mr Sebők for the breaches of Article 19(1) and 19(11) of MAR.
7
PROCEDURAL MATTERS
7.1
This Final Notice is given to Mr Sebők under and in accordance with section 390
of the Act. The following statutory rights are important.
Decision maker
7.2
The decision which gave rise to the obligation to give this Final Notice was made
by the Settlement Decision Makers.
Manner and time for payment
7.3
The financial penalty must be paid in full by Mr Sebők to the Authority on or before
26 January 2025.
If the financial penalty is not paid
7.4
If all or any of the financial penalty is outstanding on 27 January 2025, the
Authority may recover the outstanding amount as a debt owed by Mr Sebők and
due to the Authority.
7.5
Sections 391(4), 391(6) and 391(7) of the Act apply to the publication of
information about the matter to which this Notice relates. Under those provisions,
the Authority must publish such information about the matter to which this Notice
relates as the Authority considers appropriate. The information may be published
in such manner as the Authority considers appropriate. However, the Authority
may not publish information if such publication would, in the opinion of the
Authority, be unfair to Mr Sebők or prejudicial to the interests of consumers or
detrimental to the stability of the UK financial system.
7.6
The Authority intends to publish such information about the matter to which this
Final Notice relates as it considers appropriate.
Authority contacts
7.7
For more information concerning this matter generally, contact Joseph Abadoo
at the Authority (direct line: 0207 0665022 / email: joseph.abadoo@fca.org.uk)
and Emma Binnington (direct line: 0207 0665350 / email:
emma.binnington@fca.org.uk).
Financial Conduct Authority, Enforcement and Market Oversight Division
APPENDIX 1
Transactions made by Mr Sebők during the Relevant Period
Transaction
type
Volume of
traded shares Price per share
Total
purchase /
sell price
Balance of
Shares held
(post-trade)
1
04/04/2019 Sell
2,000
31.38
62760
12,700
3
30/04/2019 Buy
2,000
34.0825
68165
12,700
4
07/05/2019 Buy
2,000
34.1148
68229.6
14,700
5
05/06/2019 Sell
2,000
34.9454
69890.8
12,700
6
05/06/2019 Sell
2,000
35.43
70860
10,700
7
17/06/2019 Buy
2,000
34.8332
69666.4
12,700
8
03/07/2019 Sell
2,000
35.79
71580
10,700
9
24/07/2019 Buy
2,000
36.3476
72695.2
12,700
10
05/08/2019 Sell
2,000
36.52688
73053.76
10,700
12
06/09/2019 Buy
2,000
35.0778
70155.6
12,000
13
19/09/2019 Sell
2,000
35.6
71200
10,000
14
02/10/2019 Buy
1,000
35.5999
35599.9
11,000
15
10/10/2019 Sell
1,000
36.85
36850
10,000
16
11/10/2019 Sell
1,000
37.6665
37666.5
9,000
17
15/10/2019 Sell
1,000
38.7031
38703.1
8,000
18
10/01/2020 Sell
1,000
40.3211
40321.1
7,000
22
27/01/2020 Buy
1,000
40.448
40448
5,000
23
28/01/2020 Buy
1,000
40.769015
40769.015
6,000
27
03/02/2020 Buy
1,000
40.94241
40942.41
4,000
31
25/02/2020 Buy
1,000
38.49728
38497.28
2,000
32
25/02/2020 Buy
1,000
38.048425
38048.425
3,000
33
25/02/2020 Buy
1,000
39.663912
39663.912
4,000
34
27/02/2020 Sell
1,000
33.864175
33864.175
3,000
35
10/03/2020 Sell
1,000
34.041
34041
2,000
36
10/03/2020 Sell
1,000
34.8359
34835.9
1,000
37
11/03/2020 Sell
1,000
32.3155
32315.5
0
38
02/04/2020 Buy
1,000
21.2235
21223.5
1,000
39
06/04/2020 Sell
1,000
22.91431
22914.31
0
40
16/04/2020 Buy
2,000
25.45528
50910.56
2,000
41
17/04/2020 Sell
2,000
26.73738
53474.76
0
42
23/04/2020 Buy
1,000
26.47821
26478.21
1,000
43
23/04/2020 Buy
1,000
26.8066
26806.6
2,000
44
24/04/2020 Buy
1,000
25.826189
25826.189
3,000
47
28/04/2020 Buy
1,000
27.7146
27714.6
2,000
50
01/05/2020 Buy
1,000
27.77644
27776.44
1,000
51
01/05/2020 Buy
1,000
27.39437
27394.37
2,000
52
04/05/2020 Buy
1,000
26.68241
26682.41
3,000
55
13/05/2020 Buy
1,000
26.925938
26925.938
2,000
56
14/05/2020 Buy
1,000
26.070316
26070.316
3,000
60
20/05/2020 Sell
1,000
29.02532
29025.32
-1,000
61
20/05/2020 Buy
1,000
28.1868
28186.8
0.00
62
27/05/2020 Buy
900
33.471532 30124.3788
900
63
27/05/2020 Buy
600
33.3316
19998.96
1,500
64
27/05/2020 Buy
1,000
33.8456
33845.6
2,500
65
03/06/2020 Sell
1,000
36.90
36900
1,500
66
03/06/2020 Sell
500
36.80
18400
1,000
67
05/06/2020 Buy
600
35.40
21240
1,600
68
05/06/2020 Buy
1,000
35.50
35500
2,600
69
08/06/2020 Buy
1,000
35.24
35240
3,600
70
08/06/2020 Sell
1,000
36.20
36200
2,600
71
09/06/2020 Buy
1,000
35.24
35240
3,600
72
09/06/2020 Sell
1,000
36.4002*
36400.18
2,600
73
06/07/2020 Sell
600
34.60
20760
2,000
74
08/07/2020 Buy
600
33.2263*
19935.78
2,600
77
23/07/2020 Sell
1,000
35.30
35300
0
78
24/07/2020 Buy
1,000
34.44
34440
1,000
79
27/07/2020 Buy
1,000
32.94
32940
2,000
80
28/07/2020 Sell
600
32.9229*
19753.74
1,400
81
29/07/2020 Sell
600
35.50
21300
800
82
31/07/2020 Buy
1,000
31.60
31600
1,800
83
31/07/2020 Buy
1,500
32.64
48960
3,300
85
04/08/2020 Sell
500
33.46
16730
2,000
86
04/08/2020 Sell
500
33.20
16600
1,500
87
04/08/2020 Sell
1,000
32.92
32920
500
88
05/08/2020 Sell
500
33.70
16850
0
89
02/09/2020 Sell
1,000
36.90
36900
-1,000
90
02/09/2020 Buy
1,000
36.0009*
36000.9
0
91
07/09/2020 Buy
1,000
35.8889*
35888.88
1,000
92
07/09/2020 Buy
1,000
36.20
36200
2,000
93
09/09/2020 Sell
1,000
35.50
35500
1,000
94
09/09/2020 Buy
800
34.40
27520
1,800
95
10/09/2020 Buy
930
35.22
32754.6
2,730
96
10/09/2020 Buy
900
35.24
31716
3,630
97
10/09/2020 Buy
1,000
35.50
35500
4,630
98
10/09/2020 Sell
900
36.00
32400
3,730
100
14/09/2020 Sell
1,000
35.80
35800
1,830
102
15/09/2020 Sell
900
35.80
32220
0
103
16/09/2020 Sell
1,000
35.94
35940
-1,000
105
16/09/2020 Buy
900
35.12
31608
-1,000
106
16/09/2020 Buy
1,000
35.34
35340
0
107
17/09/2020 Buy
1,000
35.40
35400
1,000
108
18/09/2020 Buy
900
34.976*
31478.4
1,900
109
18/09/2020 Sell
500
34.81976*
17409.88
1,400
110
18/09/2020 Buy
1,000
35.28
35280
2,400
111
02/10/2020 Sell
1,000
31.90
31900
1,400
112
20/10/2020 Sell
1,400
33.88
47432
0
113
27/10/2020 Buy
1,000
34.08
34080
1,000
114
03/11/2020 Sell
500
34.46
17230
500
115
03/11/2020 Sell
500
34.30
17150
0
APPENDIX 2
RELEVANT STATUTORY AND REGULATORY PROVISIONS AND GUIDANCE
Relevant provisions of the Market Abuse Regulations
1. Article 19(1) provides that persons discharging managerial responsibilities, as
well as persons closely associated with them, shall notify the issuer of every
transaction conducted on their own account relating to the shares or debt
instruments of that issuer or to derivatives or other financial instruments linked
thereto. Such notifications shall be made promptly and no later than three
business days after the date of the transaction. The provisions of Article 19(1)
apply once the total amount of transactions has reached the threshold set out in
Article 19(8) or (9) as applicable, within a calendar year.
2. Article 19(2) provides that transactions conducted on the own account of the
persons referred to in paragraph 1, shall be notified by those persons to the
competent authorities.
3. Article 19(3) provides that the issuer shall ensure that the information that is
notified in accordance with [Article 19(1)] is made public promptly and no later
than three business days after the transaction.
4. Article 19(1) applies to any subsequent transaction once a total amount of EUR
5,000 has been reached within a calendar year. The threshold of EUR 5,000 shall
be calculated by adding without netting all transactions referred to in Article
19(1).
5. Article 19(11) provides that persons discharging managerial responsibilities
shall not conduct any transactions on their own account relating to the shares or
debt instruments of the issuer or derivatives or other financial instruments linked
thereto during a closed period of 30 calendar days before the announcement of
an interim financial report or a year-end report which the issuer is obliged to make
public according to (a) the rules of the trading venue where that issuer’s shares
are admitted to trading or (b) national law.
6. Article 19(12) provides that transactions prohibited by Article 19(11) may be
executed only if authorised by the issuer (a) on a case-by-case basis due to the
existence of exceptional circumstances, such as severe financial difficulty, which
require the immediate sale of shares or (b) due to the characteristics of the trading
involved for transactions made under, or related to, an employee share or saving
scheme, qualification or entitlement of shares, or transactions where the
beneficial interest in the relevant security does not change.
Relevant statutory provisions
7. The Authority’s general duties established under section 1B of the Act include
the strategic objective of ensuring that the relevant markets function well, and
the operational objective of protecting and enhancing the integrity of the UK
financial system.
8. Sections 123(1)(b) and 123(2) of the Act give the Authority the power to
impose a penalty of such amount as it considers proportionate on a person who
has contravened a provision of MAR other than Articles 14 or 15.
Relevant regulatory provisions
9. In exercising its power to impose a financial penalty and to impose a restriction
in relation to the carrying on of a regulated activity, the Authority has had regard
to the relevant regulatory provisions published in the Authority’s Handbook. The
main provisions that the Authority considers relevant are set out below.
10. Chapter 6 of DEPP, which forms part of the Authority’s Handbook, sets out
the Authority’s statement of policy with respect to the imposition and amount of
financial penalties under the Act. In particular, DEPP 6.5B sets out the five steps
for penalties imposed on individuals in non-market abuse cases.
FINAL NOTICE
1
ACTION
1.1
For the reasons given in this Final Notice, the Authority hereby imposes on Mr
Sebők a financial penalty of £123,500 for breaching Articles 19(1) and 19(11) of
the Market Abuse Regulations (596/2014) (“MAR”).
1.2
Mr Sebők agreed to resolve this matter and qualified for a 30% discount under
the Authority’s executive settlement procedures. Were it not for this discount, the
Authority would have imposed a financial penalty of £176,400.
2
SUMMARY OF REASONS
2.1
Wizz Air Holdings plc (“Wizz Air”) is listed on the main market of the London Stock
Exchange. Mr Sebők commenced employment with Wizz Air in 2004 and was
promoted to the role of Chief Supply Chain Officer on 1 April 2019. On assuming
this role, Mr Sebők, a senior employee at Wizz Air, became a member of the Wizz
Air Leadership Team.
2.2
As a senior executive at Wizz Air, with regular access to confidential information
containing inside information and the power to make managerial decisions
affecting Wizz Air’s future development and business prospects, Mr Sebők was a
person discharging managerial responsibilities (“PDMR”) as defined under Article
3(1)(25)(b) of MAR.
2.3
Article 19(1) of MAR requires a PDMR of an issuer to notify the issuer and the
Authority of transactions in the issuer’s shares within three business days of any
such transactions. Between 4 April 2019 and 6 November 2020 (the “Relevant
Period”), Mr Sebők, as a PDMR, breached Article 19(1) of MAR by failing to notify
Wizz Air and the Authority of 115 transactions in Wizz Air shares (“PDMR Trades”)
within three business days, or at all. The net result of the PDMR Trades was that
Mr Sebők sold the entirety of his holding in Wizz Air shares which, as at 4 April
2019, stood at 14,700 shares valued at £454,377.
2.4
Article 19(11) of MAR sets out restrictions on Mr Sebők’s ability to transact in
shares of Wizz Air as a PDMR. Specifically, it restricted him from transacting in
shares of Wizz Air during a closed period of 30 calendar days before the
announcement of Wizz Air’s interim or year-end financial reports. Article 19(12)
of MAR permits transactions during such periods only if specifically authorised by
Wizz Air in particular circumstances.
2.5
Mr Sebők breached Article 19(11) of MAR, whilst transacting in the PDMR Trades
during the Relevant Period, by trading during the closed period of Wizz Air’s
interim and year-end financial reports on 18 occasions in respect of four half-year
and/or full year financial reports.
2.6
As a result of Mr Sebők’s failure to notify Wizz Air of the PDMR Trades, Wizz Air
was not able to announce the transactions to the market in a timely fashion in
accordance with Article 19(3) of MAR. Mr Sebők also failed to seek prior
authorisation from Wizz Air to trade, as required by Wizz Air’s internal policies,
which resulted in Wizz Air not being given the opportunity to approve or reject his
personal account dealing.
2.7
The prompt notification to issuers and the Authority of transactions in the shares
of the issuer conducted by PDMRs on their own account, or by persons closely
associated with them, provides a means for the Authority to supervise markets.
2.8
Article 19(3) of MAR requires issuers to announce PDMR notifications to the
market promptly and no later than three business days after the relevant
transaction. Hence, the prompt notification to the issuer and the Authority by
PDMRs is also valuable information for market participants.
3
2.9
The Article 19 MAR notification regime and restrictions on closed-period trading
are preventative measures against market abuse. They provide valuable timely
information to investors and ensure that PDMRs who often hold inside information
do not gain an unfair advantage in their trading activities. In addition, market
transparency is a prerequisite for the confidence of markets and of company’s
shareholders.
2.10
Failure by PDMRs to notify dealing transactions in the shares of their issuers and
unauthorised trading by PDMRs during closed periods undermines the Authority’s
strategic objective of ensuring that relevant markets function well, and its
operational objective of protecting and enhancing the integrity of the UK financial
system.
3
DEFINITIONS
3.1
The definitions below are used in this Final Notice:
“the Authority” means the Financial Conduct Authority.
“DEPP” is the Decision Procedures and Penalties Manual, which forms part of the
Authority’s Handbook.
“the Act” means the Financial Services and Markets Act 2000.
“MAR” means the Market Abuse Regulations.
“Mr Sebők” refers to the individual András Sebők.
“PDMR” means a person discharging managerial responsibilities, as defined in
Article 3(1)(25) of MAR.
“Relevant Period” means the period between 4 April 2019 and 6 November 2020
during which Mr Sebők breached Article 19(1) of MAR on 115 separate occasions
and Article 19(11) of MAR on 18 separate occasions.
“Share Dealing Code” refers to Wizz Air’s internal policy document entitled “Rules
on Share Dealings” dated 24 May 2016.
“the Tribunal” means the Upper Tribunal (Tax and Chancery Chamber).
“Wizz Air” means Wizz Air Holdings plc.
“WLT” means the Wizz Air Leadership Team.
4
FACTS AND MATTERS
Mr Sebők’s Role at Wizz Air
4.1
Mr Sebők joined Wizz Air as the Head of Treasury and Controlling in 2004. He was
promoted to the role of Chief Supply Chain Officer on 1 April 2019 at which time
he became a member of the WLT. During the Relevant Period, Mr Sebők was a
senior employee at Wizz Air, with his reporting line one step removed from the
Chief Executive Officer (i.e. his manager reported directly to the Chief Executive
Officer).
4.2
Upon his appointment as Chief Supply Chain Officer Mr Sebők agreed, in
consenting to the terms of his contract of employment, to adhere to his obligations
as a PDMR. These obligations included the requirement to notify Wizz Air of any
dealing in Wizz Air shares and to comply with applicable restrictions on share
dealing as set out within MAR and the Share Dealing Code. Throughout the
Relevant Period, Wizz Air sent emails to all PDMRs, including Mr Sebők, reminding
them of restrictions on trading during closed periods and the requirement to seek
Wizz Air’s authorisation for share trading at all other times.
4.3
Under Article 3(1)(25)(b) of MAR, a PDMR is a senior executive who has regular
access to inside information relating directly or indirectly to the issuer and power
to take managerial decisions affecting the future developments and business
prospects of the issuer.
4.4
Mr Sebők was a member of the WLT, which consisted of twelve members all with
senior positions at Wizz Air. These included the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer and other Chief of staff. Although Mr
Sebők was not a member of the Board of Wizz Air, as Chief Supply Chain Officer
and a member of the WLT, he regularly attended Board meetings and had access
to Wizz Air’s draft financial results announcements before they were made public.
Mr Sebők also attended monthly financial performance briefings which would
typically include a review of quarterly performance. Mr Sebők, by virtue of his
responsibilities as Chief Supply Chain Officer, also had access to confidential
information about a range of Wizz Air’s matters including aircraft purchase and
negotiation, general procurement activities, airport portfolio and financial
performance. This indicates that he had regular access to inside information.
4.5
The Authority considers that Mr Sebők was a PDMR for the purposes of MAR in
light of the facts above.
The PDMR requirements
4.6
On 3 July 2016, MAR came into effect. Article 19(1) of MAR requires PDMRs to
notify the Authority and the issuer of every transaction conducted on their own
account in their issuer’s shares, debt instruments, derivatives or other linked
financial instruments promptly and no later than three business days after the
transactions if the total amount of transactions per calendar year has reached
€5,000.
4.7
The issuer in turn must publicly announce that information promptly and no later
than within three business days after the transactions under Article 19(3) of MAR.
4.8
A PDMR is also prohibited from conducting transactions in the issuer’s securities
during a closed period of 30 calendar days before the announcement of an interim
financial or year–end report under Article 19(11) of MAR.
4.9
During the Relevant Period, Wizz Air’s Share Dealing Code set out the
circumstances and procedures under which directors, PDMRs and other employees
of the firm could trade in securities. These not only reflected, as a minimum, the
requirements of Article 19 of MAR but also imposed more stringent requirements.
Specifically, under the Share Dealing Code, PDMRs were obligated to comply with
the following requirements prior to trading:
4.9.1
they had to fill in a clearance form and send it to the Chief Corporate
Officer for approval; and
4.9.2
they could not execute the proposed transactions until clearance to deal
had been received.
4.10
The Share Dealing Code also set out provisions for PDMRs that covered the
requirements after trading. These stated that PDMRs must notify their dealings to
Wizz Air and the Authority by the end of the business day after the day in which
the dealing takes place. Wizz Air would then announce the dealing to the market.
4.11
During the Relevant Period Mr Sebők received, on multiple occasions, emails
which reminded him as to his obligations as a PDMR, referred him to the Share
Dealing Code and reminded him as to the commencement of closed periods.
4.12
The emails containing the reminders in respect of the Share Dealing Code and
PDMR obligations were sent to Mr Sebők and the other PDMRs by email on 1 April
2020 and 1 October 2020. With the exception of the emails on 1 April 2019 and
27 June 2019, all had the following documents attached as part of the Share
4.12.1 the Rules on Share Dealings, including in relation to the process for
obtaining clearance to deal and the subsequent notification of dealings;
4.12.2 the Acknowledgement Form for the Share Dealing Code;
4.12.3 the Clearance to Deal Form; and
4.12.4 the Notification of Dealing Form.
4.13
The Rules on Share Dealings required Mr Sebők to complete and return the form
“Acknowledgement of Share Dealing Code” to show that he had read and
understood his legal and regulatory obligations. The document invited him to
contact the Chief Corporate Officer should he have any questions.
4.14
In light of Mr Sebők’s senior position and responsibilities at Wizz Air, the Authority
considers that it would be reasonable to expect Mr Sebők to understand that the
emails, referenced at paragraph 4.12 above, contained important information,
relevant to a small group of senior individuals with positions of responsibility
within Wizz Air, and that he would be expected to pay close attention to them.
4.15
Mr Sebők also signed a contract of employment dated 1 April 2019 with Wizz Air
to formalise his appointment as Chief Supply Chain Officer. The contract of
employment contained a section entitled “Dealing in securities”, which required
Mr Sebők to adhere to the provisions of MAR as implemented by the Share Dealing
Code.
4.16
The Authority considers that it is reasonable to expect Mr Sebők, in his role as
Chief Supply Chain Officer, to read important documentation setting out his
regulatory obligations.
4.17
In light of the above, the Authority considers that Mr Sebők was on notice as to
his PDMR obligations.
7
The Trading
4.18
At the start of the Relevant Period, Mr Sebők’s holding in Wizz Air securities
amounted to 14,700 shares. During the Relevant Period, Mr Sebők executed 115
trades in Wizz Air’s securities which he failed to report in contravention of his
reporting obligations as a PDMR. These trades included both share sales and
purchases, amounting to a movement of 121,960 Wizz Air shares worth
£4,147,136.66, and ultimately resulted in Mr Sebők disposing of his entire holding
in Wizz Air shares.
4.19
The first trade of 2019 within the Relevant Period took place on 4 April 2019 and
resulted in the sale of 2,000 shares priced at £31.38 each. The first trade of 2020
within the Relevant Period took place on 10 January 2020 and resulted in the sale
of 1000 shares priced at £40.32 each. Both trades were individually valued greater
than €5,000, with the former equating to £62,760 and the latter equating to
£40,320, thereby exceeding the annual cumulative threshold of €5,000 set out in
Article 19(8) of MAR which triggers a PDMR’s obligation to notify their issuer and
the Authority. In both instances, and in all but one subsequent trade during the
Relevant Period, Mr Sebők failed to notify either Wizz Air or the Authority within
three business days of the trades’ execution, or at all, as required under Article
19(1) of MAR.
4.20
Out of the 115 transactions executed by Mr Sebők during the Relevant Period, 18
transactions additionally contravened Article 19(11) of MAR in that they occurred
during a closed period of 30 calendar days before the announcement of an interim
financial report or year-end report relating to Wizz Air. These 18 transactions
amounted to a movement of 17,900 shares worth £556,492.27 in Wizz Air
securities. They consisted of the following:
4.20.1 One transaction, in advance of Wizz Air’s two announcements on 31 May
2019 of its results for the 12 months to 31 March 2019, in which Mr Sebők
purchased 2,000 shares.
4.20.2 One transaction, in advance of Wizz Air’s announcement on 13 November
2019 of its results for the six months to 30 September 2019, in which Mr
Sebők sold 1,000 shares.
4.20.3 Twelve transactions, in advance of Wizz Air’s announcement on 3 June
2020 of its results for the 12 months to 31 March 2020, in which Mr Sebők
sold 6,000 shares and purchased 5,500 shares.
4.20.4 Four transactions, in advance of Wizz Air’s announcement on 5 November
2020 of its results for the six months to 30 September 2020, in which Mr
Sebők sold 2,400 shares and purchased 1,000 shares.
Notification of Share Dealings
4.21
Mr Sebők did not notify Wizz Air following the execution of any of the 115 trades
in Wizz Air securities during the Relevant Period, nor did he seek Wizz Air’s
authorisation for the 18 trades out of 115 which were executed within closed
periods prior to announcements of Wizz Air’s financial reports. Wizz Air was
informed of Mr Sebők’s trading by the Authority in September 2021 and
investigated the matter. Mr Sebők failed to provide Wizz Air with an explanation
for his conduct. As a result, Wizz Air terminated Mr Sebők’s employment with
immediate effect. Wizz Air then announced Mr Sebők’s trades to the market on
4.22
The Authority found that Mr Sebők sought Wizz Air’s authorisation to transact in
Wizz Air securities on one occasion during the Relevant Period on 28 August 2020,
followed by his duly notifying Wizz Air when this transaction had completed and
Wizz Air notifying the market on 1 September 2020. In this instance, Mr Sebők
followed the correct internal process, including sending a completed clearance
form to the Chief Corporate Officer, obtaining approval and then submitting a
completed notification form. The Authority has not counted this transaction within
the 115 transactions which he executed without notification. However, the
Authority considers this to demonstrate Mr Sebők’s awareness of the requirement
to notify Wizz Air.
5
FAILINGS
5.1
The statutory and regulatory provisions relevant to this Final Notice are referred
to in Appendix 2.
5.2
For the reasons set out below, the Authority considers that Mr Sebők breached
Article 19(1) of MAR on 115 occasions and Article 19(11) of MAR on 18 occasions
within the Relevant Period.
5.3
Mr Sebők was the Chief Supply Chain Officer and member of the WLT with regular
access to confidential information containing inside information in relation to Wizz
Air. Mr Sebők agreed, in signing his contract of employment as Chief Supply Chain
Officer, to adhere to his obligations as a PDMR to notify Wizz Air of any dealing in
Wizz Air shares and to comply with applicable restrictions on share dealing as set
out within MAR and the Share Dealing Code. He was periodically reminded by
email of his obligations as a PDMR throughout the Relevant Period.
5.4
Article 19(1) of MAR sets out what Mr Sebők was required to do as a PDMR when
dealing in shares in Wizz Air. Specifically, it required him to notify Wizz Air and
the Authority of transactions conducted on his own trading account in relation to
Wizz Air shares promptly and no later than three business days after the dates of
the relevant transactions.
5.5
During the Relevant Period, Mr Sebők failed to notify Wizz Air or the Authority of
115 transactions in Wizz Air shares, as set out in Appendix 1, promptly and no
later than within three business days of the relevant transactions. As a result,
Wizz Air was not able to announce the necessary PDMR notifications to the market
in accordance with Article 19(3) of MAR.
5.6
Article 19(11) of MAR sets out the periods during which Mr Sebők was prohibited
as a PDMR from any dealings in shares of Wizz Air. Specifically, it restricted him
from conducting transactions in shares of Wizz Air during a closed period of 30
calendar days before Wizz Air’s announcement of an interim financial report or
year-end report, which Wizz Air is required to make public according to the rules
of the London Stock Exchange or the laws of the United Kingdom.
5.7
On 18 separate occasions during the Relevant Period, Mr Sebők breached Article
19(11) of MAR by transacting in Wizz Air shares during multiple closed periods,
as set out at paragraphs 4.20.1 – 4.20.4.
6
SANCTION
6.1
The Authority’s policy for imposing a financial penalty is set out in Chapter 6 of
DEPP. In respect of conduct occurring on or after 6 March 2010, the Authority
applies a five-step framework to determine the appropriate level of financial
penalty. DEPP 6.5B sets out the details of the five-step framework that applies in
respect of financial penalties imposed on individuals in non-market abuse cases.
6.2
The total penalty that the Authority hereby imposes on Mr Sebők is £123,500. In
summary, this penalty is calculated as follows.
Step 1: disgorgement
6.3
Pursuant to DEPP 6.5B.1G, at Step 1 the Authority seeks to deprive an individual
of the financial benefit derived directly from the breach where it is practicable to
quantify this.
6.4
The Authority has not identified any personal financial benefit that Mr Sebők
derived directly from the breach.
6.5
Step 1 is therefore £0.
Step 2: the seriousness of the breach
6.6
Pursuant to DEPP 6.5B.2G, at Step 2 the Authority determines a figure that
reflects the seriousness of the breach. That figure is based on a percentage of
the individual’s relevant income. The individual’s relevant income is the gross
amount of all benefits received by the individual from the employment in
connection with which the breach occurred, and for the period of the breach.
6.7
Mr Sebők’s breaches of Article 19(1) and 19(11) of MAR are related to his
employment at Wizz Air during the Relevant Period. The Authority is of the view
that Mr Sebők received remuneration commensurate with his responsibilities and
so it is reasonable to base the amount of penalty on his remuneration. The
Authority has therefore determined a figure based on a percentage of Mr Sebők’s
relevant income during the period of the breaches.
6.8
The period in which Mr Sebők committed these breaches was from 4 April 2019
to 6 November 2020. Mr Sebők’s relevant income for this period was £588,132.45.
6.9
In deciding on the percentage of the relevant income that forms the basis of the
Step 2 figure, the Authority considers the seriousness of the breach and chooses
a percentage between 0% and 40%. This range is divided into five fixed levels
which represent, on a sliding scale, the seriousness of the breach; the more
serious the breach, the higher the level. For penalties imposed on individuals there
are the following five levels:
Level 1 – 0%
Level 2 – 10%
Level 3 – 20%
Level 4 – 30%
Level 5 – 40%
6.10
In assessing the seriousness level, the Authority takes into account various factors
which reflect the impact and nature of the breach, and whether it was committed
deliberately or recklessly.
6.11
DEPP 6.5B.2G(12) lists factors likely to be considered ‘level 4 or 5 factors’. Of
these, the Authority finds the following factors to be relevant:
6.11.1 Mr Sebők received emails reminding him as to his PDMR obligations on
no less than seven occasions during the Relevant Period;
6.11.2 Mr Sebők demonstrated his awareness of the process (and therefore the
requirement) to obtain Wizz Air’s approval prior to transacting in its
shares and to notify Wizz Air thereafter; and
6.11.3 therefore, the Authority considers that Mr Sebők committed the breaches
deliberately or recklessly.
6.12
DEPP 6.5B.2G(13) lists factors likely to be considered ‘level 1, 2 or 3 factors’. Of
these, the Authority finds the following factors to be relevant:
6.12.1 There is no evidence that any of Mr Sebők’s breaches had a material
adverse impact on the market or significantly impacted Wizz Air’s share
price.
6.13
The Authority also finds that the following factors are relevant to the nature and
impact of the breaches:
6.13.1 Mr Sebők was a member of WLT;
6.13.2 Mr Sebők was not an authorised person;
6.13.3 although Mr Sebők was properly informed and received frequent
reminders setting out his PDMR responsibilities arising from MAR, he was
not provided with any individual training on MAR and his responsibilities
as a PDMR;
6.13.4 Mr Sebők’s breaches were repeated across a large number of occasions;
and
6.13.5 Mr Sebők’s failure to notify Wizz Air ultimately meant that Wizz Air was
unable to notify the market of the PDMR transactions in the usual way.
6.14
Taking all of these factors into account, the Authority considers the seriousness
of the breach to be level 4 and so the Step 2 figure is 30% of £588,132.45.
6.15
Step 2 is therefore £176,439.74.
Step 3: Mitigating and aggravating factors
6.16
Pursuant to DEPP 6.5B.3G, at Step 3 the Authority may increase or decrease the
amount of the financial penalty arrived at after Step 2, but not including any
amount to be disgorged as set out in Step 1, to take into account factors which
aggravate or mitigate the breach.
6.17
The Authority considers that the following factors aggravate the breach:
6.17.1 in the months prior to MAR coming into force, the Authority and other
agencies published a large volume of materials relating to the
implementation of MAR, including the obligations of PDMRs, and such
materials were widely accessible.
6.18
The Authority considers that the following factors mitigate the breach:
6.18.1 Mr Sebők has not been subject to any prior disciplinary action by the
Authority.
6.19
Having taken into account the factors above, the Authority does not find it
necessary to make any adjustment for Step 3.
6.20
Step 3 is therefore £176,439.74.
Step 4: adjustment for deterrence
6.21
Pursuant to DEPP 6.5B.4G, if the Authority considers the figure arrived at after
Step 3 is insufficient to deter the individual who committed the breach, or others,
from committing further or similar breaches, then the Authority may increase the
penalty.
6.22
The Authority considers that the Step 3 figure of £176,439.74 represents a
sufficient deterrent to Mr Sebők and others, and so has not increased the penalty
at Step 4. Step 4 is therefore £176,439.74.
Step 5: settlement discount
6.23
Pursuant to DEPP 6.5B.5G, if the Authority and the individual on whom a penalty
is to be imposed agree the amount of the financial penalty and other terms, DEPP
6.7 provides that the amount of the financial penalty which might otherwise have
been payable will be reduced to reflect the stage at which the Authority and the
individual reached agreement. The settlement discount does not apply to the
disgorgement of any benefit calculated at Step 1.
6.24
The Authority and Mr Sebők reached a settlement agreement and so a 30%
discount applies to the Step 4 figure.
6.25
The Authority has rounded down the final penalty to the nearest £100. Step 5 is
therefore £123,500.
6.26
The Authority therefore hereby imposes a total financial penalty of £123,500 on
Mr Sebők for the breaches of Article 19(1) and 19(11) of MAR.
7
PROCEDURAL MATTERS
7.1
This Final Notice is given to Mr Sebők under and in accordance with section 390
of the Act. The following statutory rights are important.
Decision maker
7.2
The decision which gave rise to the obligation to give this Final Notice was made
by the Settlement Decision Makers.
Manner and time for payment
7.3
The financial penalty must be paid in full by Mr Sebők to the Authority on or before
26 January 2025.
If the financial penalty is not paid
7.4
If all or any of the financial penalty is outstanding on 27 January 2025, the
Authority may recover the outstanding amount as a debt owed by Mr Sebők and
due to the Authority.
7.5
Sections 391(4), 391(6) and 391(7) of the Act apply to the publication of
information about the matter to which this Notice relates. Under those provisions,
the Authority must publish such information about the matter to which this Notice
relates as the Authority considers appropriate. The information may be published
in such manner as the Authority considers appropriate. However, the Authority
may not publish information if such publication would, in the opinion of the
Authority, be unfair to Mr Sebők or prejudicial to the interests of consumers or
detrimental to the stability of the UK financial system.
7.6
The Authority intends to publish such information about the matter to which this
Final Notice relates as it considers appropriate.
Authority contacts
7.7
For more information concerning this matter generally, contact Joseph Abadoo
at the Authority (direct line: 0207 0665022 / email: joseph.abadoo@fca.org.uk)
and Emma Binnington (direct line: 0207 0665350 / email:
emma.binnington@fca.org.uk).
Financial Conduct Authority, Enforcement and Market Oversight Division
APPENDIX 1
Transactions made by Mr Sebők during the Relevant Period
Transaction
type
Volume of
traded shares Price per share
Total
purchase /
sell price
Balance of
Shares held
(post-trade)
1
04/04/2019 Sell
2,000
31.38
62760
12,700
3
30/04/2019 Buy
2,000
34.0825
68165
12,700
4
07/05/2019 Buy
2,000
34.1148
68229.6
14,700
5
05/06/2019 Sell
2,000
34.9454
69890.8
12,700
6
05/06/2019 Sell
2,000
35.43
70860
10,700
7
17/06/2019 Buy
2,000
34.8332
69666.4
12,700
8
03/07/2019 Sell
2,000
35.79
71580
10,700
9
24/07/2019 Buy
2,000
36.3476
72695.2
12,700
10
05/08/2019 Sell
2,000
36.52688
73053.76
10,700
12
06/09/2019 Buy
2,000
35.0778
70155.6
12,000
13
19/09/2019 Sell
2,000
35.6
71200
10,000
14
02/10/2019 Buy
1,000
35.5999
35599.9
11,000
15
10/10/2019 Sell
1,000
36.85
36850
10,000
16
11/10/2019 Sell
1,000
37.6665
37666.5
9,000
17
15/10/2019 Sell
1,000
38.7031
38703.1
8,000
18
10/01/2020 Sell
1,000
40.3211
40321.1
7,000
22
27/01/2020 Buy
1,000
40.448
40448
5,000
23
28/01/2020 Buy
1,000
40.769015
40769.015
6,000
27
03/02/2020 Buy
1,000
40.94241
40942.41
4,000
31
25/02/2020 Buy
1,000
38.49728
38497.28
2,000
32
25/02/2020 Buy
1,000
38.048425
38048.425
3,000
33
25/02/2020 Buy
1,000
39.663912
39663.912
4,000
34
27/02/2020 Sell
1,000
33.864175
33864.175
3,000
35
10/03/2020 Sell
1,000
34.041
34041
2,000
36
10/03/2020 Sell
1,000
34.8359
34835.9
1,000
37
11/03/2020 Sell
1,000
32.3155
32315.5
0
38
02/04/2020 Buy
1,000
21.2235
21223.5
1,000
39
06/04/2020 Sell
1,000
22.91431
22914.31
0
40
16/04/2020 Buy
2,000
25.45528
50910.56
2,000
41
17/04/2020 Sell
2,000
26.73738
53474.76
0
42
23/04/2020 Buy
1,000
26.47821
26478.21
1,000
43
23/04/2020 Buy
1,000
26.8066
26806.6
2,000
44
24/04/2020 Buy
1,000
25.826189
25826.189
3,000
47
28/04/2020 Buy
1,000
27.7146
27714.6
2,000
50
01/05/2020 Buy
1,000
27.77644
27776.44
1,000
51
01/05/2020 Buy
1,000
27.39437
27394.37
2,000
52
04/05/2020 Buy
1,000
26.68241
26682.41
3,000
55
13/05/2020 Buy
1,000
26.925938
26925.938
2,000
56
14/05/2020 Buy
1,000
26.070316
26070.316
3,000
60
20/05/2020 Sell
1,000
29.02532
29025.32
-1,000
61
20/05/2020 Buy
1,000
28.1868
28186.8
0.00
62
27/05/2020 Buy
900
33.471532 30124.3788
900
63
27/05/2020 Buy
600
33.3316
19998.96
1,500
64
27/05/2020 Buy
1,000
33.8456
33845.6
2,500
65
03/06/2020 Sell
1,000
36.90
36900
1,500
66
03/06/2020 Sell
500
36.80
18400
1,000
67
05/06/2020 Buy
600
35.40
21240
1,600
68
05/06/2020 Buy
1,000
35.50
35500
2,600
69
08/06/2020 Buy
1,000
35.24
35240
3,600
70
08/06/2020 Sell
1,000
36.20
36200
2,600
71
09/06/2020 Buy
1,000
35.24
35240
3,600
72
09/06/2020 Sell
1,000
36.4002*
36400.18
2,600
73
06/07/2020 Sell
600
34.60
20760
2,000
74
08/07/2020 Buy
600
33.2263*
19935.78
2,600
77
23/07/2020 Sell
1,000
35.30
35300
0
78
24/07/2020 Buy
1,000
34.44
34440
1,000
79
27/07/2020 Buy
1,000
32.94
32940
2,000
80
28/07/2020 Sell
600
32.9229*
19753.74
1,400
81
29/07/2020 Sell
600
35.50
21300
800
82
31/07/2020 Buy
1,000
31.60
31600
1,800
83
31/07/2020 Buy
1,500
32.64
48960
3,300
85
04/08/2020 Sell
500
33.46
16730
2,000
86
04/08/2020 Sell
500
33.20
16600
1,500
87
04/08/2020 Sell
1,000
32.92
32920
500
88
05/08/2020 Sell
500
33.70
16850
0
89
02/09/2020 Sell
1,000
36.90
36900
-1,000
90
02/09/2020 Buy
1,000
36.0009*
36000.9
0
91
07/09/2020 Buy
1,000
35.8889*
35888.88
1,000
92
07/09/2020 Buy
1,000
36.20
36200
2,000
93
09/09/2020 Sell
1,000
35.50
35500
1,000
94
09/09/2020 Buy
800
34.40
27520
1,800
95
10/09/2020 Buy
930
35.22
32754.6
2,730
96
10/09/2020 Buy
900
35.24
31716
3,630
97
10/09/2020 Buy
1,000
35.50
35500
4,630
98
10/09/2020 Sell
900
36.00
32400
3,730
100
14/09/2020 Sell
1,000
35.80
35800
1,830
102
15/09/2020 Sell
900
35.80
32220
0
103
16/09/2020 Sell
1,000
35.94
35940
-1,000
105
16/09/2020 Buy
900
35.12
31608
-1,000
106
16/09/2020 Buy
1,000
35.34
35340
0
107
17/09/2020 Buy
1,000
35.40
35400
1,000
108
18/09/2020 Buy
900
34.976*
31478.4
1,900
109
18/09/2020 Sell
500
34.81976*
17409.88
1,400
110
18/09/2020 Buy
1,000
35.28
35280
2,400
111
02/10/2020 Sell
1,000
31.90
31900
1,400
112
20/10/2020 Sell
1,400
33.88
47432
0
113
27/10/2020 Buy
1,000
34.08
34080
1,000
114
03/11/2020 Sell
500
34.46
17230
500
115
03/11/2020 Sell
500
34.30
17150
0
APPENDIX 2
RELEVANT STATUTORY AND REGULATORY PROVISIONS AND GUIDANCE
Relevant provisions of the Market Abuse Regulations
1. Article 19(1) provides that persons discharging managerial responsibilities, as
well as persons closely associated with them, shall notify the issuer of every
transaction conducted on their own account relating to the shares or debt
instruments of that issuer or to derivatives or other financial instruments linked
thereto. Such notifications shall be made promptly and no later than three
business days after the date of the transaction. The provisions of Article 19(1)
apply once the total amount of transactions has reached the threshold set out in
Article 19(8) or (9) as applicable, within a calendar year.
2. Article 19(2) provides that transactions conducted on the own account of the
persons referred to in paragraph 1, shall be notified by those persons to the
competent authorities.
3. Article 19(3) provides that the issuer shall ensure that the information that is
notified in accordance with [Article 19(1)] is made public promptly and no later
than three business days after the transaction.
4. Article 19(1) applies to any subsequent transaction once a total amount of EUR
5,000 has been reached within a calendar year. The threshold of EUR 5,000 shall
be calculated by adding without netting all transactions referred to in Article
19(1).
5. Article 19(11) provides that persons discharging managerial responsibilities
shall not conduct any transactions on their own account relating to the shares or
debt instruments of the issuer or derivatives or other financial instruments linked
thereto during a closed period of 30 calendar days before the announcement of
an interim financial report or a year-end report which the issuer is obliged to make
public according to (a) the rules of the trading venue where that issuer’s shares
are admitted to trading or (b) national law.
6. Article 19(12) provides that transactions prohibited by Article 19(11) may be
executed only if authorised by the issuer (a) on a case-by-case basis due to the
existence of exceptional circumstances, such as severe financial difficulty, which
require the immediate sale of shares or (b) due to the characteristics of the trading
involved for transactions made under, or related to, an employee share or saving
scheme, qualification or entitlement of shares, or transactions where the
beneficial interest in the relevant security does not change.
Relevant statutory provisions
7. The Authority’s general duties established under section 1B of the Act include
the strategic objective of ensuring that the relevant markets function well, and
the operational objective of protecting and enhancing the integrity of the UK
financial system.
8. Sections 123(1)(b) and 123(2) of the Act give the Authority the power to
impose a penalty of such amount as it considers proportionate on a person who
has contravened a provision of MAR other than Articles 14 or 15.
Relevant regulatory provisions
9. In exercising its power to impose a financial penalty and to impose a restriction
in relation to the carrying on of a regulated activity, the Authority has had regard
to the relevant regulatory provisions published in the Authority’s Handbook. The
main provisions that the Authority considers relevant are set out below.
10. Chapter 6 of DEPP, which forms part of the Authority’s Handbook, sets out
the Authority’s statement of policy with respect to the imposition and amount of
financial penalties under the Act. In particular, DEPP 6.5B sets out the five steps
for penalties imposed on individuals in non-market abuse cases.