Sameer Patel and Robin Chhabra have today been fined £180,541 and £95,000 respectively for market abuse by the Financial Services Authority (FSA). Patel’s penalty included disgorgement of the profits he made through market abuse. The FSA has also banned both men from working in the financial services industry.
Chhabra worked as a research analyst at Evolution Securities and on three occasions passed confidential information to his friend, Patel. Patel, an experienced spread better, placed spread bets on the basis of that information, making a profit of £85,541. On 21 November 2008 the Regulatory Decisions Committee of the FSA found that Chhabra and Patel had committed market abuse and imposed the penalties outlined above. Both men referred that decision to the Financial Services and Markets Tribunal (the Tribunal).
After a week long hearing in October 2009 the Tribunal also found that Patel and Chhabra had committed market abuse. The Tribunal had been due to consider the penalty at a separate hearing on 31 March 2010. Before that, however, both men decided not to contest the penalty and withdrew their references. The penalties imposed are therefore those proposed in November 2008 by the FSA.
Margaret Cole, director of enforcement, said:
"We will continue to seek both civil and criminal penalties to tackle market abuse. This has been a long and hard fought case. It demonstrates our commitment to taking the tough action necessary to underpin our credible deterrence strategy.
"Patel and Chhabra breached the standards expected of approved persons and have paid the price. These fines and the ban from working in the financial services industry are significant penalties. This should serve as a reminder to all that market abuse will not be tolerated and the FSA will continue to pursue and take action against anyone who believes they can make easy money off the back of confidential information."