Tesco shares / fraudulent reporting.

[Amethyst]

Re: Tesco shares / fraudulent reporting.

S90A FSMA is the route for shareholders; have to buy or hold, relying on published information (note no presumption of reliance unlike US) and suffer loss as a result of false info or withholding true info. See "Shareholder Claims" published by ******s
David Greene Edwin Coe LLP

David, completely separate subject, Julian (Tools on here) was trying to contact you last week regarding the Online vehicle Frauds and Barclays. I think he left a couple messages on your voicemail.

Your shareholder claims book is a bit beyond the reach of most of us @ Ł110

For ease here's the links to s.90

90AAmendments to the Financial Services and Markets Act 2000

Schedule 10A makes provision about the liability of issuers of securities to pay compensation to persons who have suffered loss as a result of—

(a)a misleading statement or dishonest omission in certain published information relating to the securities, or

(b)a dishonest delay in publishing such information

Schedule 10 - http://www.legislation.gov.uk/ukpga/2000/8/schedule/10


Compensation for false or misleading statements etc
90.Compensation for statements in listing particulars or prospectus
90ZA.Liability for key investor information
90A.Amendments to the Financial Services and Markets Act 2000
90B.Power to make further provision about liability for published information

[DavidGreene]

Re: Tesco shares / fraudulent reporting.

We are looking at class action but as others may be but these claims not easy under 90A and still fresh country. RBS claim is for instance under s90 which is a much easier section, which we have used for fraud in IPO's.

[righty]

Re: Tesco shares / fraudulent reporting.

David is this interesting?


Employees with a fiduciary duty must disclose their own breach of that
duty
Tesco Stores Ltd v Pook [2004] IRLR 618

It is well known that a director owes a fiduciary duty to his employer (employer meaning shareholder).
This reflects the position of trust held by a director and it means that the director must act at all times in the best interests of the company, that is the shareholders. This duty can sometimes apply to senior employees who are in a special position of trust, but the
courts have been careful not to extend it to other employees. The existence of a duty of fidelity means that the
individual must not be in a conflict of interests with his employer, he must not profit from his position at the expense
of this employer, he must show undivided loyalty to his employer, and he must not use or disclose confidential
information of his employer. the duty includes a positive duty to disclose wrongdoing. But what about where the
wrongdoing is the employee’s own?
The case
Mr Pook was a senior employee of Tesco, just below board level. He was dismissed when Tesco discovered that he
had concocted and approved a series of fraudulent invoices in the region of Ł500,000 payable to a company owned
by Mr Pook and that he had accepted a bribe from Delta Computer Systems Ltd, a supplier to Tesco.
Tesco suspended Mr Pook while they investigated the allegations. The day before the termination of his employment,
Mr Pook sought to exercise share options held by him in a Tesco employee share option scheme. The court held that
Mr Pook had received a bribe from Delta, who sought to ensure Tesco would continue to buy its services, and that
this was a breach of Mr Pook’s fiduciary duty. Mr Pook’s breach of fiduciary duty prevented him from exercising his
rights under the share option scheme.
The court also considered (as an aside) whether Mr Pook should have disclosed to Tesco his own breach of fiduciary
duty as well any breach by others, and it found that he should, otherwise the position would be absurd.
Mr Pook was later convicted of theft and sentenced to imprisonment.
What to take away
This is a reminder that it is not just directors who owe a fuduciary duty to their employer, but the duty can extend to
senior employees. A breach of fiduciary duty is a serious breach of contract which may entitle the emploer to refuse
to permit the exercise of share options. Further, an employee with a fiduciary duty must act in the interests of the
employer, even at the expenses of his own interests.

[DavidGreene]

Re: Tesco shares / fraudulent reporting.

yes but that is a claim by the Company not shareholders save under the derivative provisions of the Companies Act. Shareholders will not be able to use those provisions in Tesco. Shareholders can have a direct claim for fraud against directors but difficult to prove the loss suffered in a case like Tesco. The revelation at Arfen is a much more interesting case in that respect.

[sean5302]

Re: Tesco shares / fraudulent reporting.

yes but that is a claim by the Company not shareholders save under the derivative provisions of the Companies Act. Shareholders will not be able to use those provisions in Tesco. Shareholders can have a direct claim for fraud against directors but difficult to prove the loss suffered in a case like Tesco. The revelation at Arfen is a much more interesting case in that respect.

How is it difficult to prove the loss in a case like Tesco, please?
If I sell my shares today, have I not crystallised a loss compared to the original price paid?
I can see there might be other factors influencing the share price, but the price has stabilised within a few pence up and down daily, ever since the "accounting errors" disclosure caused a very large fall.

[DavidGreene]

Re: Tesco shares / fraudulent reporting.

yes you will have crystallised

[des8]

Re: Tesco shares / fraudulent reporting.

It is well known that a director owes a fiduciary duty to his employer (employer meaning shareholder).

This is an interesting assumption that employer means shareholder.

The employer is the company, which is a separate entity to the shareholders.
Being a director does not automatically make one an employee.
For a director to be an employee the Company must enter into a service contract (which satisfies usual common law tests about employment) with the director that makes him an employee of the company (not the shareholders).

Just thought I'd mention it!

[righty]

Re: Tesco shares / fraudulent reporting.

Shareholders OWN the company and can should they wish, (assuming a majority) dismiss/fire or direct the directors to follow the shareholders reasonable instructions

[righty]

Re: Tesco shares / fraudulent reporting.

Tesco Stores Ltd v Pook [2004] IRLR 618

[des8]

Re: Tesco shares / fraudulent reporting.

A directors fiduciary duty is to the company, not the individual shareholders.
An employees fiduciary duty is to his employer. If the employer is a company, it is to the company, not the individual shareholders.

To start using the terms loosely is the way to confuse readers who are not au fait with company law and your post 68 is an oversimplification.

This is now off topic and I'm trying to watch a rugby match!!

[righty]

Re: Tesco shares / fraudulent reporting.

des perhaps you should read the judgment I posted

[des8]

Re: Tesco shares / fraudulent reporting.

Have now and cannot see where it states, even as an obiter, that employer means shareholder.
Now back to topic, this is a minor diversion:wink1:

[sean5302]

Re: Tesco shares / fraudulent reporting.

Matters are progressing. I'd like to say smoothly, but MCOL seem very inefficient.
I received a defence from Halifax Sharedealing, saying they didn't sell the shares and merely acted as brokers. I'll contest that if we get to court, based on their statement in their Ts&Cs guaranteeing I'd lose no money in the event of fraud.

Tesco's solicitors failed to respond in time and I requested Judgment online, only to find that MCOL had erred. Tesco's solicitors (Freshfields, Bruckhaus Deringer) then responded by claiming they had paid my claim. I contacted MCOL and submitted form N236 to say that the claim had not been paid.
MCOL said they had erred again.

Then Tesco's solicitors sent a new pack, requesting that the claim be transferred to the High Court on the multi-track, due to the "complexity" involved and also that they "believed other parties may commence identical proceedings". They say they paid Ł155 for that request, which they'd like me to be ordered to pay them.
They'd like my claim struck out on the basis that there is little hope of my claim succeeding or, in the alternative, they'd like it to go to the High Court. This matter is apparently now being decided by a judge at MCOL.
As far as I'm concerned, this claim is for half of the Ł10,000 limit on the small claims track and looks like simple misrepresentation.
I wasn't expecting an easy ride but MCOL inefficiency is becoming a problem.

[Mr $quandaŁot]

Re: Tesco shares / fraudulent reporting.

I doubt you have a case against Halifax. By fraud they mean - and I think the judge would agree - fraudulent activities on your trading account.

Whether you have a claim against Tesco is more complicated.

In general, when you buy shares you need to take a long-term view. We all want to make a quick, easy buck but it just doesn't happen.

Have Tesco reduced their dividends? If so by how much?

Buying shares in any case is risky and I for one do know quite a lot about that. I lost Ł1.5k with Yell (Hibu) when they got de-listed.

I haven't spent a penny at Tesco (apart from Harris + Hoole coffee chain) and have no plans to return. Tesco quality is inferior to other supermarkets. Unfortunately, for you, many people feel the same as I do. Having said that, the worst that can realistically happen is that Tesco gets taken over by the likes of Carrefour. Walmart could never buy it as they already own Asda. If Carrefour (or anyone else) suddenly got interested in Tesco, the shares would go up. Whether they would go up enough for you to make a profit, or even break-even, is another matter. In any case, you would then get Carrefour (or whoever buys Tesco) shares.

It might just be worth holding on rather than starting selling in panic and taking legal action!

[sean5302]

Re: Tesco shares / fraudulent reporting.

With the greatest respect, I find myself wondering why you bothered posting.

Have you read the thread at all?

Share prices can go down as well as up. I know that and make judgements based on published data.

That data has to be truthful or the publisher leaves themselves open to allegations of misrepresentation. Don't you understand that?

In terms of Halifax Sharedealing, they are hurriedly altering their terms and conditions and have changed the wording now, specifically removing the sentence that a buyer will not sustain any loss as a result of fraudulent activity. Now, why do you think they're doing that, all of a sudden?