Britain’s Financial Services Authority is continuing its crackdown on the misuse of inside information, saying that it is seeking to sanction the chairman of capital markets at J.P. Morgan Cazenove for alleged market abuse.
The FSA published a notice on Tuesday indicating that it has decided to fine J.P. Morgan Cazenove executive Ian Hannam £450,000 for market abuse, specifically improper disclosure. The regulator alleges that he disclosed inside information regarding one of the firm’s existing clients in two emails sent to a prospective client in late 2008.
In the notice, the FSA says that it accepts that Hannam did not set out to commit market abuse, but that it considers “Hannam’s failings [to be] serious in view of his experience and his senior position within J.P. Morgan.”
“He was a role model for the people that worked for him and for others at J.P. Morgan,” it says.
The allegations have not been proven. Hannam is opposing the action and has referred the matter to the Upper Tribunal, where he and the FSA will each present their cases. It will then determine the appropriate action for the FSA to take. The tribunal may uphold, vary or cancel the FSA’s decision.
“Inside information is extremely valuable and must be handled with care to ensure that it is properly controlled and that appropriate safeguards are observed. This applies to all market participants but is particularly important for senior practitioners who will regularly interact with a wide circle of contacts,” said Tracey McDermott, acting FSA director of enforcement and financial crime.