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FSA ban for market abuse

The FSA has banned stockbroker Graham Betton for market abuse over his role in a scheme designed to ramp up a share price.

Betton, a director of agency-only stockbroker SP Bell, will be fined but the amount is yet to be decided by the Upper Tribunal.

In 2003, Eagle bought 85 per cent of Fundamental-E Investments and acquired SP Bell to sell FEI stock to its clients. Betton instructed SP Bell staff to sell FEI shares to clients, many of whom were unaware the shares were being bought and sold on their behalf. To defer clients having to pay, many trades were rolled over from client to client without being settled. The FSA says Betton personally executed at least 75 rollover trades of over340 million shares in FEI.

Betton worked closely with market-maker Winterflood on the rollover trades and increased Winterflood’s bid/offer quote.

Trading in FEI shares was suspended in July 2004, leaving £9m of unsettled trades which neither SP Bell nor its clients could meet and SP Bell went into administration. In May, SP Bell director Simon Eagle was banned and fined £2.8m for market abuse.

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