More Fines Handed Down In Greenlight Insider-Trading Case

Jan 27 2012 | 12:35pm ET

British regulators continued to levy fines for insider-trading at Greenlight Capital today—and they may not be finished.

The Financial Services Authority reprimanded Alexander Ten-Holter, a former Greenlight compliance officer and now the hedge fund's trader in the U.K., and JPMorgan Cazenove trading desk director Caspar Agnew for oversight failures. Ten-Holter was ordered to pay a £130,000 fine for failing to ensure that Greenlight founder David Einhorn's order to sell shares of British pub chain Punch Taverns was not based on confidential information. It also barred Ten-Holter from serving as a compliance officer.

The FSA also order Agnew to pay £65,000 for failing to flag the transactions as suspicious.

On Wednesday, the FSA ordered Einhorn to pay £7.2 million for ordering Greenlight to sell its entire stake in Punch after learning, from a broker, that the company was about to announce a round of equity financing. The 2009 sale helped Greenlight avoid £5.8 million in losses.

"Mr. Ten-Holter's approach to compliance oversight was wholly inadequate," the FSA's Tracey McDermott said. As for Agnew, McDermott said he "was an experienced trader," and "so should have been suspicious of this transaction and aware of his responsibilities to report it." McDermott did say that Agnew's "misjudgment" was made "entirely honestly."

Einhorn denied that he had knowingly violated British market-abuse rules, an explanation the FSA accepted.

The FSA is also investigating the broker who allegedly tipped Einhorn off to Punch's plans. Andrew Osborne, formerly of Bank of America Merrill Lynch, could be fined £350,000, Bloomberg News reports.


In Depth

bfinance: Fees Falling Across Asset Classes, Yet Overall Investor Costs Still Climbing

May 16 2017 | 9:53pm ET

Despite unprecedented attention on fees, new research from investment consultancy...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Risk-Based Compliance: Why Oversight Of Outsourcing Is Critical

May 10 2017 | 7:02pm ET

Compliance is notoriously one of the trickiest middle office functions for funds...

 

From the current issue of