A significant fine has been imposed by the UK Financial Conduct Authority (FCA) on a financial advisor for engaging in insider trading. The penalty amounts to £100,281, coupled with a prohibition on future participation in the UK financial services industry.
The individual in question was an advisor with ITM Power Plc during the year 2022. At that time, he had access to confidential information regarding a market announcement slated for release on October 27. Subsequently, it was reported that ITM’s share price plummeted by approximately 37% following the announcement.
Prior to this market-related announcement, he leveraged his insider knowledge to sell a combined total of 125,000 shares belonging to himself and a family member for £124,287. This maneuver allowed him to capitalize on the anticipated dip in share value, as he later purchased 180,000 shares costing about £140,700. This sequence of transactions enabled him to achieve a profit of £26,575 derived from the variation in share prices.
Given his background and experience in the financial sector, the FCA highlighted that he was fully aware that his actions constituted insider dealing, representing a breach of trust. As part of his obligations, he needed to secure permission from ITM before executing any transactions involving the company’s shares, which he disregarded.
Following an agreement to address this violation, he qualified for a 30% discount under the FCA’s settlement framework. Without this reduction, the initial financial penalty would have reached £126,575, in addition to interest on the profits gained from the transaction.
This case underscores the regulatory authority’s commitment to enforcing strict compliance regarding insider trading and maintaining the integrity of the financial services market in the UK. By imposing such penalties, the FCA aims to deter similar misconduct by emphasizing the serious consequences of breaching financial regulations.