A former research analyst, Robin Chhabra, and his friend Sameer Patel have been found to have committed market abuse by using inside information to carry out a series of profitable spread bets.
The decision by the Financial Services and Markets Tribunal follows a thorough investigation into Chhabra and Patel’s activities by the FSA.
Chhabra and Patel were both approved persons at the time of the market abuse.
During the summer of 2004, Chhabra was a research analyst at Evolution Securities Limited covering Ebookers plc and Eidos plc. His friend Patel was an experienced spread better who regularly placed bets on football matches and FTSE indices.
On three separate occasions, Chhabra became aware of important and confidential information about forthcoming announcements relating to Ebookers plc and Eidos. Often within minutes of getting the information, Chhabra would call Patel on his mobile phone.
Shortly after the calls, Patel placed spread bets on the Ebookers plc or Eidos stocks.
The total benefit to Patel from these bets was £85,541.
FSA director of enforcement and financial crime Margaret Cole says: “Chhabra and Patel’s behaviour fell far short of that expected of approved persons.
“By repeatedly giving Patel privileged information, Chhabra breached the trust of his clients and his employer.
“Patel exploited this information to try to make a quick profit at the expense of other investors.
“Market abuse is a serious matter 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.”