Final Notice

On , the Financial Conduct Authority issued a Final Notice to LINEAR INVESTMENTS LIMITED





For the reasons given in this Notice, the Authority hereby imposes on Linear

Investments Limited (“Linear”) a financial penalty of £409,300 pursuant to section

206 of the Financial Services and Markets Act 2000 (“the Act”).


By its Decision Notice dated 7 June 2018, the Authority notified Linear that it had

decided to impose on it a financial penalty given Linear’s failure to take reasonable

care to organise and control its affairs responsibly and effectively with adequate

risk management systems in relation to the detection and reporting of potential

instances of market abuse (in breach of Principle 3 of the Principles for Businesses).

In the period 14 January 2013 to 9 August 2015, the volume of trades routed

through Linear to its brokers was at a level which meant that it was not capable of

being adequately monitored by the manual only process in place at Linear. Linear’s

reliance on post trade surveillance undertaken by underlying brokers to discharge


its regulatory obligations was incorrect. Regardless of post-trade surveillance being

undertaken by underlying brokers, Linear was at all times responsible for ensuring

that it had effective post-trade surveillance systems in place to enable it to detect

and report potential instances of market abuse. Linear’s failure to have effective

post-trade surveillance systems in place
increased the risk that potentially

suspicious trading would go undetected.

Linear agreed all issues of fact and liability. Linear therefore qualified for a 30%

discount under the Authority’s executive settlement procedures. However, Linear

disputed the penalty of £409,300, which it referred to the Upper Tribunal (Tax and

Chancery Chamber) (“the Tribunal”). The written decision of the Tribunal was

released on 9 April 2019 and can be found on the Tribunal’s website using the

following link:

Linear Investments Ltd v The Financial Conduct Authority [2019] UKUT 0115 (TCC)

The Tribunal determined that the appropriate action for the Authority to take was

to impose a financial penalty in the sum of £409,300. This is consistent with the

penalty imposed by the Decision Notice.

In light of the above, the Authority has issued this Final Notice.


This Notice is given to Linear under in accordance with section 390 of the Act. The

following statutory rights are important.

Manner of and time for payment

The financial penalty must be paid in full by Linear to the Authority no later than

13 May 2019.

If the financial penalty is not paid

If all or any of the financial penalty is outstanding on 14 May 2019 the Authority

may recover the outstanding amount as a debt owed by Linear and due to the



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 Linear or prejudicial to the interests of consumers or detrimental to the

stability of the UK financial system.

The Authority intends to publish such information about the matter to which this

Final Notice relates as it considers appropriate.

Authority contacts

For more information concerning this matter generally, contact Natalie Birtle (direct

line: 020 7066 6856) or Lee Craddock (direct line: 020 7066 9882) at the

Enforcement and Market Oversight Division of the Authority.

Enforcement and Market Oversight Division


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