The FSA has today revealed it is prepared to go after insider traders who work directly outside the financial services industry after fining a former PR executive for abusing insider information to his own advantage.
Former group head of communications at Whitehead Mann Group Peter Bracken has been fined £15,000 for "committing market abuse" on two separate occasions after he learned WMG would issue a negative trading statement in the following days.
Bracken is said to have learned on 26 September 2002 WMG was issuing a negative trading statement so contacted his broker within an hour of receiving this information and ordered him to short sell 5,000 shares in WMG at 190p, to be settled by 10 October. A statement was issued the next day and Bracken then ordered his broker to close the short position, making him a profit of £2,430.
He is later said to have made a similar move in November 2002 when he received details of the company's interim results and other news.
Bracken again approached his broker on 12 November and instructed them to short sell 3,000 WMG shares at 123p to settle by 25 November. He closed again on 21 November at the lower price of 107p, where he produced a profit of £393.
Andrew Procter, director of Enforcement at the Financial Services Authority, said:"The FSA will not tolerate individuals abusing positions of trust for personal gain. We view the misuse of unpublished confidential information in this case as being particularly serious given the privileged position Mr Bracken occupied.
"The Market Abuse Code is fundamental to protecting investors and maintaining confidence in the UK's financial system. Market users should be in no doubt that the FSA will pursue anyone who misuses confidential information to make money."IFAonline
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