FSA doles out a record fine
THE FINANCIAL Services Authority yesterday doled out its largest ever individual market abuse fine to stockbroker Simon Eagle, branding him a “dishonest cheat”.
Eagle was rapped to the tune of £2.8m for creating a scheme to artificially inflate the price of shares in Aim-listed Fundamental-E Investments (FEI). He has also been banned from ever working in the financial services sector again.
“This scheme was rotten throughout and at the core was Simon Eagle,” said Margaret Cole, the FSA’s enforcement director. “He showed a breathtaking disregard for his clients, for his duty as an approved person and chief executive and for the effect of his scheme on markets. He has played procedural games in an attempt to avoid being held accountable for his actions and this tough action shows we are determined to keep dishonest cheats out of financial services.”
The regulator said Eagle had purchased agency-only stockbroker SP Bell in order to carry out the scheme, buying 85 per cent of FEI and using the firm as a shell in order to sell off the majority of the shares, ramp up demand for the stock and push up the price. Many of the trades were rolled over from client to client by market maker Winterflood Securities without being settled, the FSA said.
Just last month, Winterflood lost its appeal case against £4.24m of market abuse fines relating to the case, levied on the firm and two of its traders two years ago by the FSA.
Eagle had referred his case to the Financial Services and Markets tribunal, but has since withdrawn the reference.
The record fine came on the same day the new Tory/Liberal government published its final coalition agreement, including a clause that will see the regulator lose its enforcement mandate to a new white collar crime agency which will take powers from the FSA, the SFO and the OFT.