The Financial Services Authority (FSA) has fined Mr Stewart McKegg and Mr Brian Valentine Taylor for market abuse. Mr McKegg was fined £14,411.25 and Mr Taylor was fined £4,642.50. In both cases this was the disgorgement of profits made on transactions where they had inside information. If it were not for their financial circumstances both would have been fined an additional £20,000.
Mr McKegg and Mr Taylor were private investors in Amerisur Resources Plc (Amerisur, then known as Chaco Resources Plc). They were individually contacted by Amerisur’s broker on 23 May 2007 to inform them of a placing of Amerisur shares to be announced the following day. This was at a substantial discount to the market price. During the telephone calls they were informed that this was inside information and confidential.
Both committed market abuse by selling some or all of their existing shareholding prior to the public announcement of the placement. They both then rebuilt their position in Amerisur stock by subscribing for discounted shares in the placing.
Tracey McDermott, head of wholesale in the FSA’s enforcement division, said:
“Mr Taylor and Mr McKegg were given privileged access to information about the placing because they already held shares in the company. They took advantage of that information by selling existing shares, despite knowing that they must not do so. They made a profit from other, unwitting, shareholders who did not have that information.
“Retail investors who are given inside information must observe, like any other market participant, the responsibilities this information brings”.
Background
- Final Notices for Mr McKegg and Mr Taylor.
- Amerisur Resources plc is an oil and gas exploration company with projects in South America. Its shares are admitted to trading on the Alternative Investment Market of the London Stock Exchange.
- There is no suggestion of any wrongdoing by Amerisur Resources plc or the firm’s broker, Blue Oar Securities plc.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.
