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FCA fines director £59k for insider trading

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A director has been fined £59,557 for insider trading and publicly censured for improper disclosure in which he attempted to avoid a loss of £242,000.

Gavin Breeze – who holds several directorships at private companies – attempted to sell his entire 8 per cent stack in ecommerce business MoPowered, when the chief executive of the company told him he would be raising capital through a share placement that offered a significant discount on the current share price.

However, he was only able to avoid losses of £1,900 through his actions.

Breeze asked his broker to sell his entire holding “at any price”, however, the broker was only able to sell 10,000 of Mr Breeze’s 1,273,500 shares before MoPowered announced the discounted share placing at 5p on Monday 22 September 2014.

Breeze had also forwarded an email with insider information to another shareholder, who did not act on the information.

The share price fell from 20.25p to 8p in the first hour of post-announcement trading.

The FCA says Breeze proactively cooperated with its investigation and received a discount of 15 per cent as a result. He received a further 30 per cent discount for agreeing to settle at the earliest possible opportunity.

Without these discounts Breeze, who holds several directorships of private businesses and is a non-executive director of one Aim-listed company, would have faced a penalty of £85,057.

Mark Steward, director of enforcement and market oversight at the FCA, says: “Mr Breeze’s misconduct demonstrates the abuse of insider trading is still not well understood or appreciated, even by experienced industry professionals. 

“Mr Breeze has done the right thing in acknowledging his wrong-doing and offering to compensate counterparties, who were entitled to be safe from trading with or in the same market as a prohibited insider, like Mr Breeze.” 

In addition to his fine, Breeze must pay restitution of £1,850 plus interest of £259, to individuals who suffered losses from his actions.

Steward says: “Prohibited insiders, especially market professionals, will be caught and be made to account to those they have misled. While the amounts are small, the principle here is an important one and our message to market professionals in particular cannot be any clearer.” 

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