FSA fines
GLG Partners and Philippe Jabre £750,000 each for market
abuse
The Financial Services Authority has fined hedge fund manager
GLG Partners LP (GLG) and Mr Philippe Jabre, a former managing
director of the firm, £750,000 each for market abuse
and breaching FSA principles. This is the largest fine the
FSA has issued against an individual.
On 11 February 2003 Mr Jabre was 'wall crossed' by Goldman
Sachs International as part of the pre-marketing of a new
issue of convertible preference shares in Sumitomo Mitsui
Financial Group Inc (SMFG). Mr Jabre was given confidential
information and agreed to be restricted from dealing SMFG
securities until the issue was announced. Mr Jabre breached
this restriction by short selling around $16 million of SMFG
ordinary shares on 12-14 February 2003. When the new issue
was announced on 17 February 2003, Mr Jabre made a substantial
profit for the GLG Market Neutral Fund.
Margaret Cole, FSA Director of Enforcement said:
"Mr Jabre traded on information he had received as a
result of the position he enjoyed as a leading hedge fund
manager. The stability and fair operation of the markets through
legitimate pre-marketing activities is jeopardised if those
who are wall-crossed do not respect the restrictions imposed
on them.
"GLG is also responsible for Mr Jabre's market abuse.
Firms are accountable for the behaviour of their employees,
particularly if they are at a senior level."
Decision of the Financial Services and Markets Tribunal
The FSA has issued the Final Notice to GLG and Mr Jabre after
the withdrawal of Mr Jabre's reference to the Financial Services
and Markets Tribunal following the Tribunal's decisions on
27 July 2006. The Tribunal ruled on two important issues raised
by Mr Jabre's reference; the extent of the Tribunal's jurisdiction
and the scope of the market abuse regime.
Margaret Cole said:
"These decisions provide clarification on two points
of general importance to our work. The Tribunal has made it
clear that it can impose a different or greater sanction than
that imposed by the RDC. And the Tribunal has confirmed that
it is not possible for someone with inside information on
a UK traded stock to circumvent the market abuse regime by
trading in that stock on an overseas market."
Disclaimer : The contents of this site are for information purposes only
and does not constitute investment advice or counsel or solicitation for investment
in any security. We will not be liable for any direct, indirect, incidental
or consequential loss or damage that may arise out of using the information
in this site or relating to a linked third party website. Investments in hedge
funds involve a high degree of risk and you could lose all your investment.
You should carefully read a fund's offering materials, fund manager's track
record and related information for specific risk and other important information
regarding an investment in that fund before investing. Hedge funds are available
solely to accredited investors and institutional investors and not to general
public. The information in this website is based on data gathered from publicly
available websites and other information mediums therefore do not guarantee
its accuracy, nor completeness. We do not represent any hedge funds or investment/financial
advisors nor give any investment recommendations.