___________________________________________________________________________

FINAL NOTICE
___________________________________________________________________________


To:


Michiel Wieger Visser

Of
:

Flat 104, Baltasis Skersgatvis 12, Vilnius,
Lithuania LT010125

Individual ref:
MWV01004

Date:

20 September 2011

TAKE NOTICE: The Financial Services Authority of 25, The North Colonnade,
Canary Wharf, London E14 5HS ("the FSA") gives Mr Visser final notice that it has
taken the following action:

1. THE ACTION

1.1.
The FSA gave Michiel Wieger Visser (“Mr Visser”) a Decision Notice on 15 March
2010 which notified Mr Visser that the FSA had decided to take the following action:

i)
to make an order, pursuant to section 56 of the Financial Services and Markets
Act 2000 (“the Act”), prohibiting Mr Visser from performing any function in
relation to any regulated activity carried on by any authorised or exempt
person or exempt professional firm on the grounds that he is not a fit and
proper person (“the Prohibition Order”);

ii)
to withdraw approval, pursuant to section 63 of the Act, to prevent Mr Visser
from continuing to perform the functions to which the approval relates; and

iii)
to impose a financial penalty of £2,000,000 on Mr Visser pursuant to sections
66 and 123(1) of the Act, for breaching Principle 1 of the FSA’s Statements of
Principle for Approved Persons and for engaging in market abuse.

1.2.
Mr Visser referred the matter to the Upper Tribunal (Tax and Chancery Chamber)
(the “Tribunal”). The Tribunal, in a written decision dated 14 July 2011, determined
that Mr Visser should be prohibited from performing any function in relation to any
regulated activity carried on by any authorised or exempt person or exempt
professional firm, that his approval should be withdrawn, and that a financial penalty
of £2,000,000 should be imposed.

1.3.
The decision can be found on the Tribunal’s website.

1.4.
Accordingly, with effect from 20 September 2011, the FSA withdraws Mr Visser’s
approval, and imposes the Prohibition Order and a financial penalty on Mr Visser in
the amount of £2,000,000.

2. REASONS FOR THE ACTION

2.1
In January 2003, Mr Visser established a hedge fund called Mercurius International
Fund (“the Fund”), incorporated in the Cayman Islands. The Fund’s investment
manager was Mercurius Capital Management Limited (“Mercurius”), an FSA
authorised company incorporated in England and Wales. Mr Visser was a director of
the Fund and the sole director and Chief Executive Officer (“CEO”) of Mercurius at
all material times.

2.2
During the period from July 2006 to January 2008 (the “Relevant Period”), the Fund
had approximately 20 investors, who invested approximately €35 million in the Fund.
The investors primarily comprised Fund of Hedge Fund companies and other
sophisticated investors.

Investment strategy

2.3
The investment objective of the Fund, as stated on page 4 of its Prospectus, was to:

“Provide investors with consistent absolute returns primarily through
investing and trading in equities of companies incorporated or whose
principal operations are in Europe and the United States and related
instruments.”

2.4
Materials sent to investors stated that the Fund targeted annual returns greater than
25%, and that Mercurius’ investment strategy was comprised of three components:

i)
the Fundamental Stock Picking Strategy, which selected stocks that were
underperforming in the market;

ii)
the Directional (or Momentum) Strategy, which utilised short-term, high-
volume trading to take advantage of short-term trends; and

iii)
the Event Driven Strategy, which took positions in order to profit from
corporate events such as mergers, acquisitions and initial public offerings
(“IPOs”). The Event Driven Strategy, in particular, was managed by Mr Visser.

2.5
During the relevant time, the Fund acquired holdings in two (illiquid) securities: NT
Energy Limited (“NT Energy”); and Sandhaven Resources plc (“Sandhaven”). Mr
Visser had taken these positions as investment manager responsible for the Event
Driven Strategy.

i)
NT Energy was an unlisted company which had been established to acquire and
develop certain oil leases in Texas. Mr Visser expected that NT Energy would

progress rapidly to IPO stage and that the Fund would be able to exit its
investment at a profit. This scenario did not transpire.

ii)
Sandhaven appears to have been formed to provide financing to NT Energy.
The primary assets of Sandhaven were NT Energy shares. The shares of
Sandhaven were admitted to trade on PLUS markets (“PLUS”) in the course of
the Relevant Period.

Investment restrictions

2.6
During the relevant time, the Fund was subject to two key investment restrictions:

i)
The Prospectus provided that “The Fund will not: (A) invest more than 30 per
cent of its gross assets in the securities of any one issuer;” (“Investment
Restriction A”); and

ii)
By a side letter with a potential investor who subsequently invested in the Fund,
Mercurius agreed that it would not invest “more than 30% of the Fund’s value
in companies which had not been admitted on a recognised market or
exchange” (the “Side Letter Restriction”).

2.7
The restrictions were designed to limit the type and extent of risks to which the Fund
was exposed.

2.8
In September 2006, the Fund acquired shares in NT Energy. As a result of the
acquisition, the Fund’s investment in NT Energy constituted more than 30% of gross
assets in September 2006 and between December 2006 and February 2007. In March
2007, the Fund exchanged approximately half of its NT Energy shares for Sandhaven
shares. In September 2007, the Fund acquired further shares in Sandhaven. As a
result of this and later acquisitions, the Fund’s investment in Sandhaven also
constituted more than 30% of gross assets between September 2007 and January
2008.

Financing transactions

2.9
On 24 January 2007, Mercurius’ prime broker terminated its prime brokerage
agreement with Mercurius. A prime broker holds custody of a hedge fund’s portfolio
of assets, and provides financing and settlement services when the hedge fund trades.
A replacement prime broker was not found until 30 March 2007.

2.10
During this interim period, Mr Visser, with Mr Fagbulu’s assistance, committed the
Fund to two transactions:

i)
By agreement dated 6 February 2007, the Fund agreed to sell 1,300,000 Private
Trading Systems Inc (“PVTM”) shares to a counterparty for $1,200,030, and to
repurchase them three weeks later for $1,300,033; and

ii)
By email agreement dated 13 March 2007, the Fund agreed to sell 2,475,000
PVTM shares to a counterparty for $1,980,000 and to repurchase them 6 weeks
later for $2,227,500.

3

Trading in Sandhaven shares on 31 May and 29 June 2007

2.11
The Fund’s Net Asset Value (“NAV”) was calculated by reference to the closing
prices of the securities it owned on the last working day of the month. The securities
were generally priced in accordance with the market price (“marked to market”). On
31 May 2007 and 29 June 2007 (the last working days of those months), the Fund
held a Sandhaven position of approximately 4.5 million shares.

2.12
At the time Sandhaven was quoted on PLUS. PLUS is a “quote-driven” market,
where “on market” trades are placed through official market makers registered with
PLUS. Shares can also be purchased “off market” in private transactions. Under
PLUS rules, a security’s closing price is set at the mid point between the lowest offer
and highest bid quoted by the registered market makers when the market closes at
4.30pm.

2.13
On 31 May and 29 June 2007, Mr Visser instructed Mr Oluwole Fagbulu (“Mr
Fagbulu”), the Chief Financial Officer (”CFO”) of Mercurius, to place a series of
orders to buy small quantities of Sandhaven shares from a market maker at significant
(and ever increasing) premiums to the opening price on those days.

2.14
On both dates, Mr Visser separately acquired further Sandhaven securities by
instructing a broker (“Broker A”) to purchase Sandhaven shares from the same market
maker, which were subsequently sold onwards by Broker A to the Fund. Mr Visser’s
actions were intended to create the impression that there were two different buyers of
Sandhaven shares.

2.15
On 31 May 2007, the price of Sandhaven shares rose from 130p per share to 155p per
share, increasing the value of the Fund’s Sandhaven holding by approximately £1.125
million. The Fund reported a gross performance of +5.2% for May 2007. If there had
been no increase in the price of Sandhaven shares, the Fund’s performance would
have been approximately -0.3% for the month.

2.16
On 29 June 2007, the price of Sandhaven shares rose from 142p to 175p per share,
increasing the value of the Fund’s Sandhaven holding by approximately £1.5 million.
The Fund reported a gross performance for the month of +3.4%; had there been no
price increase in Sandhaven shares on 29 June 2007, the Fund’s performance for the
month would have been approximately -3.7%

Trading in Sandhaven and Private Trading Systems plc (“PTSP”) shares on 28
September 2007

2.17
On 28 September 2007, Mr Visser purchased 55,000 Sandhaven shares from a marker
maker at a premium to the opening market price. The final 20,000 shares were
purchased at 155p per share. The price of Sandhaven shares rose from 141.5p to
151.5p per share. The Fund’s Sandhaven holding increased by £875,000 as a result.
The Fund reported a gross performance of +1.9% for the month; had there been no
price increase on 28 September 2008, the Fund’s performance for the month would
have been approximately -1.1%.


2.18
On the same day he also attempted to manipulate the price of PTSP, another illiquid
stock quoted on PLUS which the Fund had heavily invested in, by placing orders to
buy at increasing prices. That attempt was unsuccessful, however.

Transactions in October 2007

2.19
In September 2007, the Fund’s replacement prime broker resigned.

2.20
On 26 October 2007, the Fund purportedly acquired 7.9 million Sandhaven shares
from a counterparty, for 35p per share, when the market price was 131.5p. In a
second transaction on 29 October 2007, the Fund purportedly acquired 120 million
PTSP shares from a company in Dubai with which it had had previous dealings, at a
discount to market price.

2.21
The shares purportedly acquired on 26 and 29 October 2007, were included in the
October NAV at the market price, rather than the off-market purchase price.

2.22
As Mr Visser knew, the Fund in fact had no funds with which to effect the
transactions, and they were both subsequently reversed, without any money or shares
changing hands.

Communications with investors

2.23
Throughout the Relevant Period, communications with investors fell mainly into four
categories: (i) telephone calls from Mr Visser to investors; (ii) letters from Mr Visser
to investors; (iii) monthly newsletters known as “Flash Reports”; and (iv)
presentations.

2.24
Telephone calls and letters from Mr Visser were provided on an ad hoc basis
throughout the Relevant Period, in order to update investors on the Fund’s
performance and investment strategy. In October 2007, Mercurius created a
presentation, as a marketing tool, to attract further investors to the Fund. The
presentation included several examples of successful trading, prepared by Mr Visser,
which did not reflect the actual outcome of the Fund’s trading.

2.25
Every month, Mercurius sent a Flash Report to investors which conveyed
performance, trading and risk information. The Flash Reports were accompanied by a
commentary discussing the Fund’s trading for the month. During the Relevant Period
16 Flash reports were provided by investors. Not one of these reports referred to the
illiquid shares in which the Fund had been so heavily invested; the performance
information they contained was incorrect and misleading.

Tribunal’s findings

2.26
Mr Visser did not appear at the Tribunal hearing and was not represented.

2.27
In its Decision dated 14 July 2011, the Tribunal focused on four elements of the
FSA’s case. In summary, these elements were:


i)
that during the relevant period Mr Visser repeatedly disregarded Investment
Restriction A and the Side Letter Restriction, as to the levels of particular
securities which the Fund was permitted to hold;

ii)
that Mr Visser engaged in deliberate market manipulation;

iii)
that Mr Visser entered into fictitious transactions, with the objective of
overstating the value of assets held by the Fund; and

iv)
that Mr Visser repeatedly issued misleading investor communications, and
deliberately failed to inform investors of important developments with the
intention of misleading them as to the performance of the Fund.

2.28
On the question of the breaches of the two investment restrictions, the Tribunal found
that:

“the breaches of the two investment restrictions were neither technical nor
insignificant, but deliberate, persistent and foolhardy; in reality, as we have
concluded, they contributed in large measure to the collapse of the Fund…It
seems to us that even if (which we doubt) the strategy of investing heavily in
NT Energy and Sandhaven, in particular, might initially have been regarded
as a sensible course, it did not excuse the repeated and wholesale disregard of
the restrictions. There was ample evidence, too, that Mercurius (at Mr
Visser’s direction) not only failed to take action to correct breaches when they
occurred, but that it aggravated them by investing even more into the relevant
stock. The restrictions were designed to prevent precisely that which
happened, namely the over-reliance on a very small number of stocks with
consequent imbalance in the portfolio and the risk, as happened, of
uncontrollable losses.”

2.29
The Tribunal concluded that Mr Visser:

“knew very well that the restrictions had been breached. One or even two
breaches might be regarded as inadvertent, but the number and frequency of
the breaches in this case, and the length of time for which they endured, are
quite inconsistent with inadvertence… what we can describe only as a
systematic concealment of the Fund’s true position over a period of many
months.”

2.30
In relation to the market manipulation, the Tribunal concluded as follows:

“Mr Visser does not deny that he committed market manipulation, and the
evidence that he did is in any event overwhelming.”

2.31
With respect to the detrimental and fictitious transactions entered into by the Fund in
February, March and October 2007, the Tribunal concluded as follows:

“Mr Visser was the driving force behind the emergency borrowings in early
2007, and the fictitious or sham transactions in late 2007.”


2.32
In respect of the transactions entered into in February and March 2007, the Tribunal
found that:

“There can in our view be no doubt that these transactions were designed to
secure short-term funds at a time when there was no other source of cash. We
are willing to accept that Mr Visser decided to enter into them out of a sense
of desperation, though his doing so does not make his decision prudent;
rather, it calls into question the quality of his management of the Fund at that
time…”

2.33
In respect of the fictitious transactions entered into in October 2007, the Tribunal
further concluded that, Mr Visser had failed to offer “any real, let alone plausible,
explanation of these transactions.”

2.34
Finally, in relation to the fourth element, the issuance of misleading investor
communications, the Tribunal concluded that Mr Visser “embarked on a deliberate
and calculated course of concealing facts from investors and of misleading them.”

2.35
The Tribunal noted that Mr Visser had not disputed the Authority’s case in respect of
this fourth element.

2.36
In reaching their decision the Tribunal has taken into account the fact that Mr Visser
was not present at the hearing:

“However, the evidence that he deliberately undertook transactions designed
to inflate the apparent (but not true) value of the Fund’s NAV is
overwhelming, and in his written submissions he made little effort to challenge
that evidence, or the conclusions drawn from it by the RDC… We are left in no
doubt that Mr Visser, once he realised that the Fund was in difficulty,
deliberately and knowingly embarked on a course of conduct designed to
conceal that difficulty from existing and prospective investors, and that he
knew that what he was doing was wrong. At first sight it might count in his
favour (if we accepted it, which we do not) that he did it in the hope of
salvaging the Fund, but there were not two or three relatively minor
transgressions; there was a prolonged course of conduct, much of it of an
extremely serious nature, including a sustained deceit of the investors.”

2.37
In respect of the prohibition and withdrawal of approval, the Tribunal stated as
follows:

“We agree with the Authority that those who fail, as in this case persistently
and in several different ways, to comply with the obligations they have
voluntarily assumed as approved persons, who engage in market
manipulation, who breach the trust reposed in them by investors, and who
systematically deceive those same investors, deserve to forfeit their right to
carry on controlled activities and to suffer severe punishment. Those are not,
and are not intended to be, alternatives; the first is designed to protect the
public, the second to mark disapproval of the person’s conduct and to deter
others from similar actions.”

7

2.38
In upholding the RDC’s suggested financial penalty, the Tribunal stated that Mr
Visser’s conduct was worse than any other it had seen. The Tribunal continued:

“Were we coming to the matter entirely afresh, we would probably have
concluded that Mr Visser’s conduct, particularly because of its systematic,
repeated and prolonged character, was so bad that even £2 million is too
little. It cannot be irrelevant that other investors lost €35 million, in part
because they were deliberately misled, while Mr Visser salvaged his own
investment before it was too late, even though the penalty is intended to punish
rather than to be used as a substitute for restitution…”.

3. IMPORTANT

3.1.
Final Notice is given to Mr Visser in accordance with section 390 of the Act.


Manner of and time for Payment

3.2.
The financial penalty of £2,000,000 must be paid in full by Mr Visser to the FSA by
no later than 4 October 2011, 14 days from the date of the Final Notice.

If the financial penalty is not paid

3.3.
If all or any of the financial penalty is outstanding on 14 October 2011, the FSA may
recover the outstanding amount as a debt owed by Mr Visser and due to the FSA.


Publicity

3.4.
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 FSA must
publish such information about the matter to which this notice relates as the FSA
considers appropriate. The information may be published in such manner as the FSA
considers appropriate. However, the FSA may not publish information if such
publication would, in the opinion of the FSA, be unfair to you or prejudicial to the
interests of consumers.

3.5.
The FSA intends to publish such information about the matter to which this Final
Notice relates as it considers appropriate.


FSA contacts

3.6.
For more information concerning this matter generally, you should contact Greg
Brandman (020 7066 3032) or Jonathan Baker (020 7066 1352) of the Enforcement
and Financial Crime Division of the FSA.




Matthew Nunan
Acting Head of Department
FSA Enforcement and Financial Crime Division