Market Abuse Regulation – FCA fines PDMR for failure to comply with Article 19 of MAR

The FCA has fined a former person discharging managerial responsibilities (PDMR) of Wizz Air Holdings plc £123,500 for trading in the company’s shares during its closed periods, and failing to notify his trades in accordance with Article 19 of the Market Abuse Regulation (MAR). This is only the second enforcement action in connection with the PDMR dealing provisions in MAR, and the first for trading during closed periods.

In October 2021, Wizz Air announced a series of dealings by one of its PDMRs from 2019 and 2020. At that time it commented that it had previously been unaware of the transactions as the PDMR had not made any notification to the company and it was made aware of them in the context of an FCA enquiry, following which the employment of the relevant PDMR was terminated with immediate effect.

The PDMR in question was the former chief supply chain officer at Wizz Air. The FCA found that between April 2019 and November 2020 he:

• was a PDMR, even though he was not a member of the board. The FCA agreed that he was a PDMR as he was a member of the 12-person leadership team (which also included the CEO, COO and CFO), regularly attended board meetings, had access to draft financial results announcements and had access to confidential information about a range of Wizz Air’s matters, indicating that he had regular access to inside information;
• was reminded of his obligations under Wizz Air’s share dealing code (which, among other things, required directors, PDMRs and other employees to seek clearance to deal) quarterly, including at the start of the relevant closed periods;
• failed to notify 115 trades in Wizz Air shares – both sales and purchases worth in excess of £4 million, and which resulted in him selling his entire holding of Wizz Air shares; and
• traded 18 times in closed periods, being the 30 calendar days before a half-yearly or year-end report.

The fine would have been £176,400 (30% of his earnings for the relevant period) had he not settled the matter.

Wizz Air itself has not been criticised, sanctioned or fined by the FCA.