The Financial Services Authority (FSA) will have to pay the full legal costs for two people it tried to fine for betting on a stock market flotation.
The FSA may have to pay several million pounds in legal costs
In May, Paul Davidson and Ashley Tatham won an appeal at the Financial Services and Markets Tribunal.
It overturned an earlier finding of the FSA that the men had manipulated demand for shares in a biotechnology firm called Cyprotex.
The tribunal has also confirmed that the FSA's decision was unreasonable.
As a result it ordered that both men should have their legal costs paid in full.
Mr Davidson has previously claimed that his legal costs have been between £2m-£3m.
In its decision earlier this year, the tribunal ruled that even if the two men had been engaged in abusing the market they should only have been given a public censure, not a fine, as no one suffered from the alleged manipulation.
A spokesman for the FSA said he did not know how much the legal costs of the two men would amount to.
The precise amount has still be decided by a court official.
In 2003, the FSA tried to fine Mr Davidson - an entrepreneur known as the Plumber - £750,000, and Tatham £100,000, for their roles in placing and accepting a spread bet on the shares of Cyprotex when it was floated on the Alternative Investment Market in 2002.
Mr Davidson owned 35% of the shares in the company at the time.
Mr Tatham was a director at the spread betting firm City Index where the bet was placed.
The alleged purpose of the spread bet was to create extra demand for the shares and thus ensure that the flotation was a success.
However, the tribunal found that the FSA had failed to prove its case that the two men were engaged in trying to manipulate demand for the company's shares.
Mr Davidson was declared bankrupt during the course of the FSA proceedings and Mr Tatham lost his job.
Both have previously threatened to pursue the FSA in the civil courts for loss of earnings.