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Wizz Air’s former supply chain manager has been fined by the UK financial watchdog for failing to properly disclose 115 personal trades in shares of the low-cost airline worth more than £4mn, many of which were done at prohibited times.
András Sebők repeatedly flouted UK market abuse regulations from when he was promoted to a senior management role in April 2019 until 19 months later — a period when the London-listed airline’s share price fluctuated sharply.
On 18 occasions, Sebők traded Wizz Air shares in the 30 days before a financial results announcement, a period when managers with access to market-sensitive information are prohibited from buying or selling shares in their company without special authorisation.
The Financial Conduct Authority said it told the airline about Sebők’s activity in September 2021 and it fired him soon afterwards following an internal investigation and his failure to explain the behaviour.
The watchdog said on Wednesday it had fined Sebők £123,500, having discounted the original fine by 30 per cent because he agreed to an early settlement. The FCA and Wizz Air would not provide contact details for Sebők, who could not be reached for comment.
It is only the second time the FCA has fined the manager of a listed company for breaching this part of the market abuse regulations since these were introduced in 2016. The first was a £45,000 penalty imposed on a former executive at Braemar Shipping Services in 2019.
“Trust and transparency are vital to keeping our markets clean,” said Steve Smart, FCA executive director of enforcement and market oversight. “Senior executives, like Mr Sebők, must report their trading and comply with the restrictions on trading during closed periods or they risk undermining the integrity of the market.”
Senior managers at listed companies must disclose any trading in shares, debt and other financial instruments issued by their company to their employer and the FCA within three working days of the transactions if the total traded in a calendar year exceeds €5,000, according to the regulator’s final decision notice.
The FCA said Sebők almost always failed to disclose his trading in Wizz Air shares “within three business days, or at all”, except on one occasion in August 2020 when he followed the correct process. But it said this only showed he was aware of the need to notify his company and how to do so.
Sebők owned 14,700 shares in the airline when he was promoted to chief supply chain officer on April 1 2019 and by the end of his trading in November 2020, he had sold his entire stake. The FCA said it had “not identified any personal financial benefit that Mr Sebők derived directly from the breach”.
Initially, Wizz Air shares rose steadily in that period. But they fell sharply after the Covid-19 pandemic froze most airline travel in March 2020. The stock subsequently rebounded, almost doubling to rise above £44 per share eight months later.
Shortly before Sebők was fired in 2021, Wizz Air caused a stir by offering its co-founder and chief executive József Váradi a £100mn bonus if its share price reached £120 by 2026.
The budget airline extended that deadline last year, but shares were trading at just £12.96 on Wednesday afternoon.
https://www.ft.com/content/230b7a35-85b3-423f-9f03-1349635f1139
