Tesco Compensation Scheme – £85 Million Settlement*
*The exchange rate at the time of settlement equaled $106.7 Million
In March 2017 Tesco plc agreed to settle a probe by regulators and pay a £129 million fine along with an additional £85 million to compensate its shareholders. Tesco is the U.K.’s largest retailer. The Financial Conduct Authority found Tesco performed “market abuse” in relation to public statements, including a release on August 29, 2014, which overstated Tesco’s expected profits as a result of its accounting irregularities.
Settlement Amount
£85 Million
(the exchange rate at the time of settlement equaled $106.7 Million)
(the exchange rate at the time of settlement equaled $106.7 Million)
Jurisdiction
United Kingdom
Class Definition
On behalf of all investors who purchased Tesco plc (“Tesco” or the “Company”) shares and bonds in the period of 29 August 2014 to 19 September 2014.
Claim Deadline Date
February 22, 2018
Class Period
August 24, 2014 – September 19, 2014
Case Notes
- On 29 August 2014, Tesco published a trading update in which it stated that it expected trading profit for the six months ending 23 August 2014 to be in the region of A£1.1bn (the “August Statement”). In issuing the August Statement, the Company’s Board of Directors (“Board”) relied on information provided to it by Tesco Stores Limited (“Tesco Stores”) which was not correct. That information did not disclose the fact or risk of the inaccuracy and those who were aware of the true position did not alert the Tesco Board to the inaccuracy.
- The August Statement contained information that gave a false or misleading impression as to certain qualifying investments in particular, the Company’s shares and certain Tesco group bonds. Tesco and Tesco Stores knew, or could reasonably have been expected to know, that the information was false or misleading. In making this finding, the Authority does not suggest that any member of the Board of Tesco knew, or could reasonably be expected to have known, that the information in the August Statement was false or misleading. However, the Authority has found that there was knowledge at a sufficiently high level but below the level of the Company’s Board as to the false and misleading nature of the August Statement for that knowledge to constitute the knowledge of Tesco, within the specific context of, and for the purposes of, market abuse.
- As a result of the market abuse, a false market was created in the Relevant Securities. Purchasers of the Relevant Securities paid a higher price than they would have paid had there not been a false market and those who purchased more than they sold in the period of the false market suffered loss as a result. The Authority considers that the false market substantially came to an end when Tesco published the September Statement, which it did on an urgent basis when the Company’s Board discovered that the August Statement contained information that gave a false or misleading impression.
