Ex-Hedge Fund Manager Hit For Insider Trading

Sep 9 2008 | 12:48pm ET

The former hedge fund manager at the center of the U.K. Financial Services Authority’s first-ever credit market-abuse case has been fined and barred for his malfeasance.

Steven Harrison, until recently a portfolio manager in London for Moore Capital Management, will pay £52,500 (US$92,500) for insider trading. He has also agreed not to work as a fund manager for one year.

The FSA said that Harrison instructed a colleague at $15 billion Moore to buy up Rhodia bonds after getting insider information that the French chemical maker would be refinancing two years ago. Harrison had been contacted by Credit Suisse Group, which was advising Rhodia on the bond issuance, for help in setting a price for the notes. Harrison was told that Rhodia would ask its board to approve the refinancing the next day.

The regulator said that Moore turned a €44,000 (US$62,500) profit on the bonds purchased with the inside information. But it said Harrison’s conduct was not deliberate, and noted he made no personal profit. Those factors, in addition to his cooperation with the probe, led to a settlement discount on the fine.

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