FSA fines former Greenlight compliance officer, JP Morgan trading director
The UK Financial Services Authority (FSA) has fined Greenlight Capital’s (UK) former compliance officer and trader Alexander Ten-Holter £130,000 for failing to question sale of Greenlight’s shareholding in Punch Taverns prior to equity fundraising in June 2009.
Holter failed to make reasonable enquiries despite being aware of the conversation between Greenlight and Punch management ahead of the sale.
According to FSA, Ten-Holter took no steps to confirm that the order was not based on inside information and simply executed instructing Caspar Agnew, a trading desk director at JP Morgan Cazenove, to sell on behalf of Greenlight.
Caspar Agnew has also been fined £65,000 for failing to identify a suspicious order from Greenlight to sell Punch shares thereby facilitating insider dealing or market abuse.
Both traders failed to act with due skill, care and diligence despite sensing suspicious circumstances surrounding Greenlight's sale of its shares.
Acting director of enforcement and financial crime Tracey McDermott said that compliance failures could have a significant impact on the orderliness and integrity of the markets when traders fail to realise their responsibilities to report it.
"Tackling market abuse and insider dealing is not just an issue for the regulator. Compliance professionals and staff on sales and trading desks play a key role in assisting the FSA in detecting and preventing market abuse. Approved persons should be in no doubt as to their responsibilities in this area and the FSA will not hesitate to take tough action where they fall down on these," McDermott added.
FSA has prohibited Holter from performing Compliance Oversight and Money Laundering reporting functions.