FINANCE LITIGATION UPDATE – JULY 2022 28 The meaning of a "person discharging managerial responsibilities" in securities fraud litigation In Allianz Global Investors GmbH & Ors ("Various Investors") v G4S Ltd ("G4S")1, Miles J held that the meaning of a "person discharging managerial responsibilities" ("PDMR") for the purposes of section 90A and Schedule 10A of the Financial Services and Markets Act 2000 ("FSMA")2 could not be expanded beyond the "clear and unambiguous"3 definition set out in Schedule 10A. However, he rejected G4S's application for strike out or summary judgment of the Claimants' allegations concerning four individuals who were directors of G4SCJS, a subsidiary of G4S (the "Subsidiary Directors"). Miles J accepted that the definition of PDMR in paragraph 8 of Schedule 10A FSMA was confined to de jure, de facto or (arguably) shadow directors (meaning section 90A and Schedule 10A FSMA did not apply to the Subsidiary Directors unless they fell within those categories). However, he considered the legislation created "elasticity" in the concept of a de facto directorship, meaning it was arguable that the Subsidiary Directors were de facto directors at the relevant time and therefore making it more appropriate to determine the issue at trial rather than in a factual vacuum. 1  EWHC 1081 (Ch). 2 These sections make issuers of publicly traded securities liable for the publication of false, misleading or incomplete information, or for a dishonest delay in the publication of relevant information, to Background The Claimants (all of whom are institutional shareholders) issued three sets of proceedings, alleging that information published by G4S (the "Published Information") contained untrue and misleading statements or omitted material information. The Claimants submitted that five individuals within G4S or its subsidiaries were PDMRs who: (1) knew, or were reckless as to, the falsity of the Published Information; and (2) acted dishonestly in delaying the publication of relevant information or failing to publish it at all (the "Alleged Breaches"). One such individual was a de jure director of G4S. The other four individuals, the Subsidiary Directors, were de jure directors of a trading subsidiary in which the Claimants alleged that fraud and wrongful billing took place, and gave rise to the Alleged Breaches. The Defendant issued an application for strike out or summary judgment on the grounds that the Subsidiary Directors were not de jure, de facto or even shadow directors of G4S. The Claimants argued that the Defendant's application ought to be refused because, for the purposes of section 90A and Schedule 10A of FSMA, the term "PDMR" was not limited to directors in the capital markets where a PDMR knows, or is reckless as to, the inaccuracy of the statement or dishonest concealment in question. 3 Various Investors v G4S Limited (formerly known as G4S plc)  EWHC 1081, at paragraph 119.