FSA fines former energy chief £350,000
Share
The FSA today fined Sibir’s former chief executive Henry Cameron £350,000 for making misleading announcements to the market regarding payments from Sibir to its major shareholder Chalva Tchigirinski.
The FSA says as chief executive, Cameron was directly responsible for this market abuse.
In two separate market announcements made by Sibir in December 2008 and February 2009, incorrect figures were given for the payments Sibir had made to Tchigirinski.
Both of these stated that Sibir had paid a total of $115.4m, when in fact the true amount was more than $300m.
The announcements also stated that the payments were advances for real estate that Sibir was to purchase from Tchigirinski, but in fact they were not supported by a written agreement and amounted to unsecured loans.
The FSA says the primary motive behind Cameron’s conduct was to retain Tchigirinski’s supportive shareholding in Sibir to prevent Tchigirinski, one of Sibir’s major shareholders, having to sell off shares as a result of his financial difficulties.
The regulator says Cameron’s actions created a false market by giving a misleading impression as to the nature and value of Sibir’s assets and the risks the company faced.
When the true position became clear, Sibir’s shares were suspended from trading on AIM and its quotation was subsequently cancelled.
Cameron was suspended from Sibir in February 2009 and dismissed in April 2009.
He qualified for a 30 per cent discount under the FSA’s settlement discount scheme. Without the discount, the financial penalty would otherwise have been £500,000.
No enforcement action was taken against Sibir.
FSA director of enforcement and financial crime Margaret Cole says: “As the most senior executive director at Sibir, Cameron should have known these announcements were misleading and the serious impact they were likely to have on the market.
“The consequences of his market abuse were so serious that it led to the suspension of trading in Sibir’s shares on AIM. Our fine reflects the gravity of his irresponsible actions and shows that we are serious about taking action against directors of publicly traded companies who commit market abuse. It is not acceptable for directors to take action which is in the interests of some shareholders while keeping others in the dark.”
FSA director of markets Alexander Justham adds: “The FSA is determined to ensure clean, efficient and orderly markets. Companies that are publicly traded need to ensure a rigorous approach to accuracy when disclosing information to the market and it is the directors of such companies who are critical in making sure such disclosure is correct and not misleading.
“This is essential to allow shareholders and investors the opportunity to make informed and accurate investment decisions as well as helping to maintain confidence in our markets.”
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
