FSA fines two individuals for market abuse
19th December 2008The Financial Services Authority (FSA) has fined Mr Stewart McKegg and Mr Brian Valentine Taylor for market abuse. Mr McKegg was fined GBP14,411.25 and Mr Taylor was fined GBP4,642.50. In both cases this was the disgorgement of profits made on transactions where they had inside information. If it were not for their financial circumstances both would have been fined an additional GBP20,000.
Mr McKegg and Mr Taylor were private investors in Amerisur Resources Plc (Amerisur, then known as Chaco Resources Plc). They were individually contacted by Amerisur's broker on 23 May 2007 to inform them of a placing of Amerisur shares to be announced the following day. This was at a substantial discount to the market price. During the telephone calls they were informed that this was inside information and confidential.
Both committed market abuse by selling some or all of their existing shareholding prior to the public announcement of the placement. They both then rebuilt their position in Amerisur stock by subscribing for discounted shares in the placing.
Tracey McDermott, head of wholesale in the FSA's enforcement division, said:
"Mr Taylor and Mr McKegg were given privileged access to information about the placing because they already held shares in the company. They took advantage of that information by selling existing shares, despite knowing that they must not do so. They made a profit from other, unwitting, shareholders who did not have that information.
"Retail investors who are given inside information must observe, like any other market participant, the responsibilities this information brings".
