Labour refers Suella Braverman to financial watchdog

“File:Official portrait of Tulip Siddiq crop 2.jpg” by Chris McAndrew is licensed under CC BY 3.0.

Labour’s Shadow City Minister, Tulip Siddiq MP, has written to the Chief Executive of the Financial Conduct Authority (FCA), Nikhil Rathi, asking that the FCA investigates Suella Braverman for potentially breaking insider trading laws by deliberately leaking sensitive government information using her personal e-mail address.

In her letter Siddiq says:

“…there are increasingly concerning suggestions that the information disclosed by the Home Secretary contained highly sensitive information regarding Government plans
for ‘growth visas’. As the guidance from the FCA makes clear, policy changes can constitute inside information. This could have affected the projections by the Office of Budget Responsibility and thereby tangibly influence financial markets. As such, the information may have constituted inside information under the Market Abuse Regulation.

At the time of the Home Secretary’s resignation, Downing Street officials informed journalists that one of the reasons for this was because her leaks included market sensitive information. I believe this is a case to answer. Furthermore, public interest and industry confidence in measures intending to prevent and deter insider trading relies on the knowledge that they will be fully enforced and that no-one is above the law.

The FCA’s guidance is clear that Article 10 of the Market Abuse Regulation, which sets out the offence of unlawful disclosure of inside information is the most relevant area of the Market Abuse Regulation for government departments. It is also clear that if a person discloses inside information‘in the normal exercise of an employment, a profession or duties’ then the law is not being broken. Regretfully, it is increasingly difficult to see that the disclosure of market sensitive, confidential,
significant policy from a personal email address to someone outside of Government is included in
this exception to the rules.

I understand that breaching insider trading laws does not require proof that market sensitive information has been acted upon for gain and that the act of unlawful disclosure is a serious offence in its own right. The FCA has successfully pursued instances of market abuse which did not deliberately set out to commit market abuse.”

Tulip Siddiq’s full letter to the FCA can be read here.

Tulip Siddiq has also written to the Cabinet Secretary, Simon Case, asking for a government inquiry into the leak. In that letter she said:

“It is alarming that the Home Secretary has been distributing documents with serious market implications without any consideration for their security or for market integrity. As the Financial Conduct Authority best practice note for government departments on handling inside information states, “because of the work you do, your organisation may hold information that is confidential, non-public and valuable. If it was disclosed to the public, it could affect the market prices of shares and other financial instruments. If handled incorrectly, it could lead to disorderly markets. This would damage the integrity of the UK market, as well as creating the potential for market abuse, such as insider dealing”.

Given the significance of the matter involving the Home Secretary I have asked the Financial Conduct Authority to investigate this case.

It is also incredibly important that the Government addresses this given the significance of the matter. If the information disclosed by the Home Secretary was indeed market sensitive, then by leaking it she could have breached the Government’s own Market Abuse Regulation. This would be very serious at any level, but it is intolerable and inexcusable for the Home Secretary to be guilty of directly leaking market sensitive plans.

The Market Abuse Regulation applies to every person and business in our country and the Home Secretary must not be subject to different rules from the rest of us. Businesses in the financial sector and listed companies are rightly required to spend millions complying with the Market Abuse Regulation. They will be dismayed that the Home Secretary seems to think that different rules apply to her compared to everyone else.”

Tulip Siddiq’s letter to Simon Case is available here.

Suella Braverman’s non-denial denial on leaking market-sensitive information

Official Cabinet Portrait; Secretary of State for the Home Department under this licence.

Suelle Braverman parsed her words carefully in her letter to the Home Office Select Committee about leaking information about a new policy of proposed “growth visas”. I have written here about how the leak, if it contained market-sensitive information, could have breached market abuse legislation.

In her letter, Braverman said:

“It did not contain details of any particular case work. It did not contain any market-sensitive data as all the data contained in the document was already in the public domain.”

Note that Braverman refers to ‘market-sensitive data’ not ‘market-sensitive information. Yet other types of information besides date can be market-sensitive or inside information.

The Financial Conduct Authority has made this clear in its guidance for government departments on inside information, which says that examples of inside information could include ‘policy changes and consultations or conclusions of any sectoral reviews which could affect one or more companies or a sector’. In this case, the growth visa policy was expected to impact the Office for Budget Responsibility’s projections and could have affected markets.

Suella Braverman is yet to deny that no market-sensitive information was leaked by her. It is a straighforward question but she is yet to answer it.

Omar Salem is a solicitor specializing in financial regulation. He writes in a personal capacity.

Did Suella Braverman break the law by leaking “growth visa” plans?

. “Boris Johnson Cabinet Meeting” by UK Prime Minister is licensed under CC BY-NC-ND 2.0.

Suella Braverman MP may have committed the market abuse offence of unlawful disclosure when she leaked government “growth visas” plans to back bench MP John Hayes. The information may have been inside information meaning that Suella Braverman may have committed the offence by sharing it outside the government.

The Sun has reported that Suelle Braverman MP, the Home Secretary, during her previous stint in the role leaked details of a proposed “growth visa”. The visa programme reportedly would have allowed thousands of highly skilled IT professionals, scientists and sports stars to work in the UK. The visa plan was expected to increase economic growth and therefore affect the Office of Budget Responsibility (OBR) forecasts.

Suella Braverman MP is reported to have sent the information to backbench Conservative MP John Hayes. She had also intended to copy in John Hayes’ wife (who has been reported to work for him) but mistakenly sent it to a staff member of another Conservative MP.

Given the potential impact on the OBR forecasts, the information that Suella Braverman MP leaked may have been market sensitive and the Sun reports a source as saying “Suella has tried to play down the scale of the cock-up but it was ­incendiary, market sensitive information.” Labour have written to the Prime Minister asking for reassurance that no market sensitive information was leaked.

There are strict legal requirements around market sensitive or inside information. The Financial Conduct Authority’s (FCA’s) guidance on this for government departments states:

“Because of the work you do, your organisation may hold information that is confidential, non-public and valuable. If it was disclosed to the public, it could affect the market prices of shares and other financial instruments. If handled incorrectly, it could lead to disorderly markets. This would damage the integrity of the UK market, as well as creating the potential for market abuse, such as insider dealing. So, it is important that your organisation satisfies itself that it complies with the relevant provisions of MAR and takes steps to identify, secure and govern how it handles and discloses inside information.”

If the information leaked by Suella Braverman was market sensitive, then it is likely to have been inside information under the Market Abuse Regulation. The relevant definition of inside information under article 7(1)(a) of MAR is:

“Information of a precise nature, which has not been made public, relating, directly or indirectly, to one or more issuers or to one or more financial instruments, and which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments.

The Mirror has reported that “a person familiar with such matters told the Mirror that, if it had fallen into the wrong hands, it could have enabled “de facto insider trading”” and that “it’s very easy to bet on Sterling movements from your phone.”

The reference to “de facto” appears to be a reference to spot currency/FX trading not being within the scope of the definition of financial instruments used in the definition of inside information under MAR. While this is the case, FX futures and other listed FX derivatives do fall within the definition of financial instrument used in MAR. It seems likely that if the information disclosed by Suella Braverman MP would have significantly affected the price of Sterling then it would have similarly affected the price of related FX futures.

Article 10(1) of MAR includes the offence of unlawful disclosure of inside information:

“For the purposes of this Regulation, unlawful disclosure of inside information arises where a person possesses inside information and discloses that information to any other person, except where the disclosure is made in the normal exercise of an employment, a profession or duties.

This paragraph applies to any natural or legal person in the situations or circumstances referred to in Article 8(4).”

Unlawful disclosure of inside information is a civil offence which is punishable by an up to unlimited fine.

It is difficult to see the disclosure of the information by Suella Braverman MP could have been in the “normal exercise of an employment, a profession or duties”, given that even she has accepted it was a “technical infringement of the rules”.

It is important to note that the offence of unlawful disclosure of inside information can be committed regardless of whether the information is used for insider trading or not. For example, Ian Hannan was fined £450,000 by the FCA for the equivalent offence under the predecessor regime to MAR for sending two emails containing inside information where it was not part of the FCA’s case that “Mr Hannam deliberately set out to commit market abuse or that Mr Hannam lacked honesty or integrity”.

There is a serious question to answer whether Suella Braverman MP committed the offence of unlawful disclosure when she leaked the proposed growth visa plans to John Hayes MP.

Omar Salem is a solicitor specializing in financial regulation. He writes in a personal capacity.

I’m standing for the Society of Labour Lawyers to help defend justice, the rule of law and human rights

Contains Parliamentary information licensed under the Open Parliament Licence v3.0.

Boris Johnson, Priti Patel, Dominic Raab, Suella Braverman and the Tories are brazenly threating justice, the rule of law and our human rights. The Society of Labour Lawyers has a great history of supporting the Labour Party and has a vital role in helping us win government and radically change the UK for the better.

I want to use my skills and experience to help SLL do even more. My experience within SLL includes:

• leading a team to assist Baroness Doreen Lawrence’s inquiry into Covid and BAME communities;
• proposing and securing gender balance requirements and the election of group chairs within SLL;
• working with the SLL Equality Committee to introduce equality training for executive committee members;
• editing this SLL report into the impact of Covid on the justice system;
• working hard and effectively on the executive committee, since joining in 2013 and revitalising Junior Labour Lawyers; and
• organising events on subjects from the rule of law to green finance, Brexit and more.

I would like to work on the SLL executive to help ensure Labour better communicates the damage the Tories are doing to legal aid, the justice system, the rule of law and human rights. These are abstract ideas but we need to communicate about them in relatable ways to have an impact.

I would also like to work to increase diversity within the SLL, as well as improve the governance and running of the society, drawing on my experience of advising clients on these issues.

Before I became a lawyer, I co-founded, with Rushanara Ali MP, the UpRising Leadership Programme for young leaders from diverse backgrounds and worked for Emily Thornberry MP, helping her retain her then marginal seat, campaign for more affordable housing and stop plans for 90 days detention.

SLL members who would like to find out more or have questions can email me at omar@omarsalem.com.

Concerns regarding Society of Labour Lawyers Executive Committee co-option process

I wrote here about my efforts to improve the culture, governance and running of the Society of Labour Lawyers (SLL), including about SLL’s working group on governance and diversity, which was set up in October 2020 and then shut down in January 2021.

One practical area where the approach of SLL has been concerning is in relation to the co-option process for the SLL Executive Committe. I have a number of concerns regarding this process. I asked for these to be discussed at the last SLL Executive Committee meeting, providing the requisite 7 days notice. However, the Chair of SLL, Kate O’Rourke, made a chair’s ruling that they should not be discussed. I therefore set out my concerns below, as I believe it is important that these are addressed. Given these concerns, there is a question of whether there needs to be greater oversight of the Officers by the SLL Executive Committee in relations to the co-option process.

• It was agreed at the February 2021 SLL Executive Committee meeting that applications for the roles of Membership Officer, Equality Officer and Website and Social Media Officer would be opened to all members through co-option to the Executive Committee. It was not agreed that there sould be a more general co-uption process for 6 executive committee places and that these be assessed collectively, as happened. This mean that the best candidate for each of those roles might not be have been appointed and the appointment process does not seem to have assessed the candidates against the specific roles that were supposed to be recruited for.
  
• As part of the application process, information on protected characteristics was collected from applicants. This included information on whether applicants were women, LGBT+, BAME or disabled. It was not explained at the point of collection how this information was to be used and it appears that it may have not been anonymised before being shared with the administrator/SLL officers. I have asked for the SLL officers clarification on this point but have not received this. The SLL Governance and Diversity Working Group had workstreams on reviewing SLL’s approach to data protection and developing processes for collecting data on protected characteristics. However, as mentioned above, the working group was shut down in January 2021 and it is not clear how these issues are being taken forward.

• The officers have told me that the data on protected characteristics was used to “overall picture of the diversity of applicants and the nominees for co-option”. It is not clear what this means in practice and I am not aware of any report or similar on this being provided to the SLL Executive Committee or SLL Equality Committee.

• Applications for co-option were scored 0-10 each in relation to the following four criteria so that there was a total score out of 40: actual and potential contribution to the Society; contribution to the Labour Party; quality of the statement; resident/not resident in London. The approach, and in particular the inclusion of “quality of the statement” as one of the criteria, is perplexing, as more usually the information collected about the candidates (e.g. from statements/interviews) would be assessed against a competency framework.

• In the past, candidate statements from all applicants for co-option have been circulated to the entire SLL Executive Committee but this was not done for the 2021 co-options.

Improving the culture, governance and running of the Society of Labour Lawyers

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For some time I have been working to try to improve the culture, governance and working practices of the Society of Labour Lawyers. A motion proposed by me was passed unanimously by the SLL December 2018 annual general meeting requesting that the SLL Executive Committee set up a working group to “review and set out recommendations and/or options for reforming SLL’s constitution, corporate governance, working processes and diversity” and that the “working group should report to a general meeting or the next SLL AGM as appropriate with recommendations and/or options for reform.”

The working group that was set subsequently set up focussed solely on the SLL constitution, rather than the wider working of the socienty. However, some important changes to the constitution were made however, including ensuring gender balance on the SLL Executive Committee and amongst Group co-chairs, creating the role of Equality Officer and introducing elections for Group co-chairs, all of which I proposed or strongly supported.

It was agreed that more work was needed regarding governance and diversity and a working group on governance and diversity was set up in October 2020. As part of this, the workstreams set out below were identified.

GOVERNANCE

Procedure for organising SLL events

Considering how SLL can support branches/groups (e.g. creating a toolkit for group/branch chairs setting out how SLL can support their activities)

Carrying out a survey and/or workshop with SLL members to get feedback from them on how SLL could be improved

Considering the values and culture SLL should support and how to promote this within SLL

Reviewing SLL’s arrangements for administrative support

Considering how SLL could better engage with members outside London

Considering whether SLL should incorporate

Process for authorising spending

Considering whether SLL should have management accounts that are circulated to the executive on a regular basis

Reviewing SLL’s approach to GDPR compliance

Considering whether SLL should have a safeguarding policy

Considering how SLL engages with the press

Considering whether SLL should have an advisory group

DIVERSITY

Considering whether/how SLL can collect diversity data from members

Considering whether SLL should develop mentoring schemes for members underrepresented groups/reverse mentoring

Considering whether the SLL EC should have diversity and/or unconscious bias training

Create equality groups for members

Considering how SLL can recruit more diverse members

Developing procedures for ensuring that SLL events are accessible as possible

Unfortunately, in January 2021, just as the working group was starting its work, it was shut down. Since then, an equality group led by the SLL Equality Officer, Kamaal Bola, was set up in July 2021 and this has been taking forwad the diversity aspects of the work plan. However, there has been no equivalent group to take forward the governance aspects. As far as I am aware, the only of these workstreams where there has been material progress since January 2021, has been in relation to a process for organising events. This is concerning as they include important areas, including in particular SLL’s culture, safeguarding, GDPR compliance and financial transparency/accountability.

The SLL AGM on 6 December is a potential opportunity to discuss SLL’s approach to these issues and how they could be progressed.

Building a better, more open and diverse Society of Labour Lawyers

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The Society of Labour Lawyers (SLL) has a great history of supporting the Labour Party to advance our shared wish for more just society in every sense, whether in the justice system, by protecting civil liberties or promoting human rights (including economic and social rights). SLL has an important role to play in helping the Labour Party develop legislative proposals that, with a Labour government, can radically change lives and Britain for the better.

I believe that SLL could do even more to best fulfill its role and operate closer to our shared Labour values. The SLL Annual General Meeting will be taking place on Monday 6 December 2021. It is an opportunity for members of SLL to meet and reflect on our future direction.

I strongly believe that SLL’s future should be based on a clear set of principles and will be working with others who share this view to support motions and candidates for the Executive Committee who share these principles:

• SLL should be focussed on practical outcomes that best support and promote the Labour Party
• SLL should be run as effectively as possible
• SLL should have a culture of collaboration aimed at getting things done
• SLL should empower and support members to participate in SLL and lead projects and initiatives
• SLL should be run as transparently as possible and with a culture that welcomes discussion, open mind thinking and accountability
• SLL should be inclusive to all members and welcome new members enthusiastically
• There should be clear and transparent procedures for the authorisation of spending by SLL
• Membership rates (the full rate is currently £50/year) should be as low as possible consisent with ensuring we have sufficient resources to achieve our aims
• Appointments within SLL should be made using transparent and fair processes
• The Officers, Executive Committee and Group chairs of SLL should be gender-balanced and reflect the diversity of Britain
• SLL should ensure as far as possible that members are safeguarded when engaging in SLL activities
• The Officers, Executive Committee, Group Chairs and all members SLL should be expected to maintain high and professional levels of conduct

If you are a member of SLL, agree with the principles above and would like to help make SLL even better please get in touch with me at omar@omarsalem.com

Memories and lessons from 9/11

I don’t talk about this much but have been encouraged by others posting on social media to share my experience of 9/11, which like for many others resonates with me to this day.

I had flown into JFK the evening before, tagging along with my father on a work trip to UNICEF headquarters in New York. The experience of being in Manhattan on 9/11 was both terrifying and surreal. I have included a couple of photos I took on the day. One is of the scene looking down into southern Manhattan towards ground zero and the other shows of chalk writing and drawing on the Maine Monument fountain at the foot of Central Park.

The photos represent the abiding lessons that I have taken from 9/11. Firstly, that the world is more interconnected and interdependent than ever. We live in a global society where something or someone on one side of the world can, for good or ill, have a profound effect on the other side of the world. Secondly, while the human race has a great capacity for hate and cruelty, it has an even greater capacity for love, caring, enlightenment and generosity. So, bedsides the horror of the day, that is what I will most remember from 9/11.

Exploring how the civil justice system responds to mental health and learning disabilities

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I am working with the Centre for Mental Health on a new project to explore how the civil justice system responds to mental health and learning disabilities.  The Royal Society of Arts, which I am a fellow of, has also published a news piece about the project.

The justice system has exceptional power to shape people’s lives. The criminal justice system can take away someone’s freedom through imprisonment; the civil justice system can decide whether an employee has been unfairly dismissed or whether a child should be taken into care.  

Often decisions by the justice system will involve people with mental health conditions or learning disabilities and, especially given the magnitude of the decisions being made, it is vital that they are treated fairly. This means that the justice system should seek to promote wellbeing and good mental health, should take decisions based on a thorough understanding of mental health and learning disabilities, and that people should not be unfairly discriminated against because of their mental health or learning disability. 

There has been some focus on the intersections between mental health and the criminal justice system, particularly through the Bradley Report, a review of people with mental health conditions or learning disabilities in the criminal justice system. This came up with important recommendations that have been acted upon, such as liaison and diversion. However, there are a number of areas in the civil justice system where there are concerns about the treatment of people living with mental health problems or learning disabilities. 

The project aims to encourage a discussion about how the justice system deals with mental health and learning disabilities. If you would like to help make this a reality or have ideas or views on this issue, please get in touch with me at omar@omarsalem.com. More information about the project is available on the Centre Health for Mental Health wesbite here .

7 steps Labour mayors and PCCs can take to improve policing and tackle racism

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Following the Open Labour event I organised on reforming the Police, I wrote an article for LabourList with practical ideas for how Labour mayors and PPCs could improve policing and tackle racism. You can read the article here. You can watch the video of the Open Labour event below.