Posts Tagged ‘market abuse’

FSA fines two more over Greenlight insider trading after David Einhorn / Siim

03/02/2012. Tags: , , , , , , , , | This post has no Comments

The Telegraph writes that two more individuals connected to US hedge fund Greenlight Capital have been fined over a multi-million pound insider-dealing case.

The City regulator fined Alexander Ten-Holter, Greenlight’s compliance officer, £130,000 and JP Morgan trader Caspar Agnew £65,000.

Both individuals were censured for failing to either identify or ask questions about Greenlight’s trading in Punch Taverns. The hedge fund sold significant tranches of Punch shares knowing the company was about to raise money, a move almost certain to drive Punch’s shares down.

Despite being told by a Greenlight analyst that the hedge fund had just spoken to Punch management and knew “secret bad things”, Mr Ten-Holter “took no steps to satisfy himself that the order was not based on inside information,” according to the FSA.

The regulator said Mr Agnew also became aware that Greenlight may have been trading on inside information but failed to act. Mr Agnew said he thought Greenlight was just “fortunate” in its timing.

Greenlight founder David Einhorn was fined £7.2m together with his fund for insider dealing. The fine’s size and action against the compliance officer shows a ramping up of FSA enforcement.

Read whole story …

Galleon Chief Rajaratnam Sentenced to 11-Year Term in Insider Case / Mait

14/10/2011. Tags: , , , , , | This post has no Comments

New York Times writes about the fallen hedge fund billionaire Raj Rajaratnam received the longest prison sentence ever for insider trading on Thursday, capping an aggressive government campaign that has ensnared dozens and may help deter the illegal use of confidential information on Wall Street.

Judge Richard J. Holwell of Federal District Court in Manhattan sentenced Mr. Rajaratnam, 54, the former head of the Galleon Group hedge fund, to 11 years in prison. A jury convicted Mr. Rajaratnam of securities fraud and conspiracy in May after a two-month trial.

“Insider trading is an assault on the free markets,” said Judge Holwell, who also imposed a $10 million fine and ordered Mr. Rajaratnam to forfeit $53.8 million in ill-gotten profits. “His crimes reflect a virus in our business culture that needs to be eradicated.”

The sentence was a watershed moment in a two-year push by federal prosecutors. Over that period, Preet S. Bharara, the United States attorney in Manhattan, has brought charges against 54 people with insider trading crimes. Of those, 50 have been either pleaded guilty or have been convicted at trial. Three others’ situations are pending, and the fourth is a fugitive.

Yet the crackdown on insider trading — a crime whose victims are not always apparent — has come at a time when many Americans have questioned why authorities have not pursued charges against bank executives over their role in the financial crisis, which still weighs on the economy.

Read the whole story …

Former Cazenove partner found guilty of insider dealing / Ahto

14/03/2010. Tags: , , , , | This post has no Comments

Malcolm Calvert, a former equities marketmaker at stock broker Cazenove, was found guilty at Southwark Crown Court on five counts of insider dealing according to UK FSA. Calvert made approximately £103,883 profit from the trades that took place between June 2003 and October 2004.

The case is the third successful prosecution for insider dealing bought by the Financial Services Authority (FSA) and is part of its ongoing drive to tackle market abuse and promote efficient, orderly and fair markets.

The prosecution is also notable for the involvement of a key witness, Bertie Hatcher – a friend of Calvert – who agreed to provide evidence in the trial having been involved in the illicit dealings himself.

Margaret Cole, director of enforcement and financial crime at the FSA, said:

“This is another milestone in our fight against market abuse. It’s a misconception that insider dealing is a victimless crime: it damages the very confidence and trust our markets operate on and it must be stopped.”

“The guilty verdict is a shot across the bow for any city workers who may be tempted to trade using insider knowledge. Our message is simple: if you take part in such activity, you run a very real risk of the FSA taking criminal action against you.”

The full sentencing and confiscation hearing will took place on Thursday 11th March.

The FSA also announced that it has fined Hatcher, a retired bookmaker and insurance broker from Ipswich, £56,098 for market abuse, and published details of the agreement it made with him which led to his assistance in the prosecution of Calvert.

The FSA found that between 2003 and 2005 Hatcher had profited from inside information, using it to buy and sell about 420,000 shares in six companies. The fine represents the full disgorgement of his share of the net profit from these trades.

As part of a settlement with the FSA, Hatcher agreed to provide ongoing assistance to the investigation. In return, the FSA agreed to sanction Hatcher using its regulatory powers rather than a criminal prosecution; Hatcher’s fine was also reduced substantially owing to his cooperation.

Ms Cole continued:

“Hatcher took part in illicit trades using inside information and profited from them; because of this he has received a significant fine. However we were also mindful of the need to encourage others to come forward and assist in the investigation and prosecution of insider dealing and market abuse – especially where it is suspected that two or more people have been involved – and that is why we made an agreement with him.

“Hatcher provided valuable evidence to the FSA, not just about his own misconduct, but also in relation to Calvert. We will continue to enter into agreements of this sort where we believe it is in the public interest and interests of justice for the FSA to do so.”

Source: FSA UK Homepage

Saudis Impose First Jail Sentence For Insider Trading / Martin

18/08/2009. Tags: , , | This post has no Comments

Tuesday, Aug 18, 2009 DUBAI (Zawya Dow Jones) — Saudi Arabia Tuesday imposed its first jail sentence for insider trading, ordering the former chairman of Bishah Agricultural Development Co. (6080.SA) to jail for three months, according to the country’s Capital Market Authority, or CMA.

Najam Eddin Ahmad Najam Eddin was sentenced to the prison term and fined SR100,000 ($26,670) after he was found “guilty of insider trading in Bishah shares based on him being the chairman of the company’s board,” the market regulator said in a statement on its Web site Najam Eddin also was barred from working for any listed company for five years, the CMA said.

The regulator said it also ordered him to pay back an amount of SAR52,690 gained through “irregular actions.”

Preventive Measures Under the Market Abuse Directive: Comparative Reality Check / Ahto

30/12/2008. Tags: , , , , | This post has no Comments

1. Introduction 

The EU Market Abuse legislation (directives, regulations and Level 3 guidelines), with the market integrity and investor confidence as its primary objectives, represents a major achievement towards integrated financial markets in EU.

As a matter of domestic legislation and other applicable rules deriving from the Market Abuse legislation, issuers are expected to have adequate preventive measures, systems, procedures and controls in place to ensure discharge of their regulatory obligations and make it as difficult as possible to commit market abuse. The higher the quality of systems and controls implemented by the issuers, the lower the likelihood that their financial instruments become subject to insider dealing or other forms of market abuse.

Given the importance of issuers’ compliance efforts under the Market Abuse regime, it is vital that substantially similar standards and compliance arrangements will evolve to protect investor confidence and market integrity within the EU. A pre-condition for such evolution is an objective understanding about issuers’ anti-market abuse systems, controls and compliance practices as applied on a daily basis.

A survey conducted between February and March 2008 among leading multinational companies listed on the Nordic Market (1)  in cooperation with the City of London, represents an effort to capture such understanding on a regional level.

The survey was conducted by means of confidential questionnaire addressed to general counsels and compliance officers of companies listed on the Nordic Market. The questionnaire focused on selected elements of preventive anti-market abuse systems and controls dealing with:

  • identification of inside information within the issuer and its group
  • ensuring fair trading by members of the management bodies and employees
  • proper handling of inside information and prevention of leaks
  • ensuring the quality and reliability of compliance procedures, techniques and record-keeping regarding the above
  • internal allocation of responsibilities and tasks regarding the above.

This article summarizes the key-findings of the survey and aims to provide useful comparative information for those in charge of legal and compliance with respect to Market Abuse rules.


CESR Takes Steps To Strengthen Market Confidence / Ahto

17/04/2008. Tags: , , , | This post has no Comments

CESR welcomes the report of the Financial Stability Forum (FSF) on Enhancing Market and Institutional Resilience published 7 April, and launches work to address some of its recommendations, as well as to implement some of the decisions taken by Europe’s Ministers at the informal ECOFIN Council of 4 and 5 April 2008. This action can therefore be seen as part of the response by CESR to issues raised by the current market turmoil. This work will be undertaken, where appropriate, in close co-ordination with our fellow Level 3 Committees covering banking, insurance and pensions (namely, CEBS and CEIOPS). The Chairman of CESR, Eddy Wymeersch noted:

“Europe’s securities regulators are currently assessing and instigating action which will contribute to the efforts being made to re-establish confidence in financial markets at a global level through IOSCO and the FSF. Today, as a first instance, we announce the launch of work in a number of key areas which will include, amongst others, finalising CESR’s work on credit rating agencies and intensifying existing efforts to co-ordinate on the investigation of market abuse. Further new work will be launched in the area of valuation of assets; market transparency and risk management by investment firms. In addition, in response to the particular request of the ECOFIN Council, CESR will develop a framework for a periodic contribution which will seek to identify major sources of potential risks in financial markets for the Financial Stability Table of the Economic and Financial Committee.”

Market abuse: CESR will seek to strengthen its current efforts to increase co-operation between its members in joint-investigations on possible cases of market abuse emerging during this period of market turbulence. At present an MOU exists to facilitate the sharing of information by Members; urgent issues groups are also established to co-ordinate and conduct joint investigations; and work has been undertaken to exchange experience and share approaches to investigations to improve best practice. Further work to review additional steps which might be taken to intensify these efforts will be conducted by CESR-Pol, chaired by Kurt Pribil the Chief Executive Officer of the Financial Market Authority (FMA) in Austria.

Market transparency: CESR will review the conclusions contained in its technical advice to the Commission on “non-equities market transparency” (published 9 August 2007 Ref. CESR/07- 284b). In particular, it will focus on aspects of post trade transparency for both retail and wholesale markets. This work will be conducted by the MiFID Expert Group, chaired by Jean- Paul Servais, Chairman of the Commission Bancaire, Financière et des Assurances (the CBFA), Belgium.

Read the whole press release …

Regulator fines Irish Times 10K EUR over Ryanair share tip / Martin

12/04/2008. Tags: , , , , | This post has no Comments writes that The Financial Regulator has fined the Irish Times €10,000 for anonymously tipping Ryanair shares.

Rules introduced in 2005 make it an offence for newspapers to publish share tips without naming the author.

The fine related to an article published in the business section of the Irish Times on February 8, 2008.

In that newspaper’s “Croesus” column, the author gave a generally upbeat assessment of Ryanair shortly after the airline published a profit warning. It concluded: “Croesus goes along with this assessment and takes the view that the best airline stock to hold in any portfolio continues to be Ryanair.”

In a statement yesterday, the Financial Regulator said: “The matter has been settled on the basis that the breach is admitted and a fine of €10,000 has been imposed.

“The Irish Times has confirmed the breach was inadvertent and has advised that it has reviewed its procedures and practices to ensure more effective compliance with the Market Abuse Regulations.”

Read the whole story …

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