The FSA has fined two private investors just under £20,000 for "market abuse" as a result of the disgorgement of profits made on transactions where they had inside information.
Both 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.
The investors 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. "Mr Taylor and Mr McKegg were given privileged access to information about the placing because they already held shares in the company," reveals Tracey McDermott, head of the wholesale enforcement division at the FSA.
She adds: "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."IFAonline
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