FSA fines and bans analyst and spread better for market abuse
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The FSA has today fined spread better Sameer Patel £180,541 and Evolution Securities research analyst Robin Chhabra £95,000 for market abuse and banned both from working in the financial services industry.
Chhabra passed confidential information to Patel on three occasions. Patel, an experienced spread better, placed spread bets on the basis of that information, making a profit of £85,541.
Patel’s penalty included disgorgement of the profits he made through the market abuse.
On November 21, 2008, the FSA’s Regulatory Decisions Committee found that Chhabra and Patel had committed market abuse and imposed the penalties outlined above.
Both men referred that decision to the Financial Services and Markets Tribunal.
After a hearing in October 2009, the Tribunal found that Patel and Chhabra had committed market abuse.
The Tribunal had been due to consider the penalty at a separate hearing on March 31, 2010, but both men decided not to contest the penalty and withdrew their references.
The penalties imposed are therefore those proposed in November 2008 by the FSA.
FSA director of enforcement Margaret Cole says: “We will continue to seek both civil and criminal penalties to tackle market abuse. This has been a long and hard fought case. It demonstrates our commitment to taking the tough action necessary to underpin our credible deterrence strategy.
“Patel and Chhabra breached the standards expected of approved persons and have paid the price. These fines and the ban from working in the financial services industry are significant penalties. This should serve as a reminder to all that market abuse will not be tolerated and the FSA will continue to pursue and take action against anyone who believes they can make easy money off the back of confidential information.”
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Readers' comments (4)
M J Winfield | 16 Apr 2010 11:37 am
If Stockbroker's recommend stock to clients, this is surely subject of the daily market chatter (Market Itelligence), therefore at what point does market chatter become market abuse?
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Anonymous | 16 Apr 2010 11:47 am
To
M J Winfield | 16 Apr 2010 11:37 am
Fair comment, but as I have stated before, the FSA need to impose fines, whenever possible, to pay for their overheads and the FSA do make the rules and can move the goal post to suit.
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Anonymous | 16 Apr 2010 11:48 am
M J Winfield are you for real
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John Harding | 19 Apr 2010 12:12 pm
Obviously we don't know from this report the details of the 'how and when' this information was passed or indeed how it was determined that this was in fact 'confidential' info.
If we accept that this was indeed a totally correct decision and all the facts, that we don't know, are indeed correct we are still left with a situation where Mr. Patel made a whole £85,541 from 'market abuse'!
Really if this is the level that the FSA feels it should be concentrating on then it should just pack it's bags and accept retirement!
Question to Margaret Cole. Can the FSA not find some larger fish to fry?
Messrs. Chhabra and Patel were hardly going to move markets with such paltry amounts.
I suggest this is more the FSA just trying to get results, any results, so that it can say "Look! Look! we are really getting to grips with these problems, we really are effective, just look at how many people we have fined."
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