Broker Fined In Greenlight Insider-Trading Case

Feb 16 2012 | 10:51am ET

British regulators have fined the former Bank of America Merrill Lynch broker who spilled a juicy corporate secret to Greenlight Capital's David Einhorn.

Andrew Osborne was ordered by the Financial Services Authority to pay £350,000 (US$550,000) for giving Einhorn advanced word of an equity sale by Punch Taverns, just one day after the hedge fund manager had declined to talk about Punch with Osborne on a confidential basis.

According to the FSA, Osborne told Einhorn about the fundraising on June 9, 2009, leading the hedge fund manager to sell a chunk of Greenlight's 13.3% stake in Punch. The sale helped Greenlight avoid £5.8 million in losses after Punch announced the stock sale.

Einhorn was ordered to pay £7.2 million in restitution and fines last month. A former compliance officer at the firm and a JPMorgan Cazenove trading desk director were also fined.

"Osborne engaged in serious market abuse," FSA acting head of financial crime Tracey McDermott said. "He was trusted as the gatekeeper of inside information and should have been extremely cautious in proceeding with the call with Greenlight."

Like Einhorn, Osborne insists that he did nothing intentionally wrong and that the fine was not "a fair outcome."

"None of the many advisers of others involved in this transaction believed that any inside information had been passed by me at the time or raised any issues regarding the sale of shares by Greenlight," he said. "The FSA accepts that I did nothing deliberate, dishonest or reckless and at worst this was an error of judgment."


In Depth

Fitch Says Alternative Asset Managers 'Stable' Despite Dry Powder

Nov 20 2014 | 9:30am ET

Ratings agency Fitch says the outlook for seven publicly traded alternative asset...

Lifestyle

Cohen Buys $101 Million Sculpture

Nov 12 2014 | 9:17am ET

Steven Cohen was the sole bidder for a rare Alberto Giacometti sculpture at Sotheby...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.