The FSA has fined two individuals in the latest update of the Greenlight Capital insider trading case. Alexander Ten-Holter and Casper Agnew were both fined for their failure to act on suspicious activity, which turned out to be insuder trading at the company.
Ten-Holter was fined £130,000 after giving the order to sell Greenlight’s entire shareholding in Punch Taverns. He was told to give the order to sell minutes after a senior person at Greenlight had been on the phone to management at Punch.
When the person told Ten-Holter to sell, he mentioned that they have one week before the stocks “plummet”.
According to the FSA this “should have alerted Ten-Holter to the risk that Greenlight may have been in receipt of inside information.”
During the call the analyst made, inside information was traded on which the company based its decision to sell. Ten-Holter simply executed the order, instructing Casper Agnew to sell on behalf of the company.
Agnew’s was fined £65,000 for following Ten-Holter’s orders to sell the shares without questioning the suspicious circumstances of the deal.
The FSA said, “Agnew failed to act with due skill, care and diligence especially because he became aware of the possibility that there had been a pre-marketing of Punch shareholders prior to the unscheduled announcement, and that major shareholders were likely to have obtained inside information through pre-marketing.
“Shareholders contacted during such a pre-marketing exercise are not allowed to trade on receipt of that inside information.”
Last week Greenlight Capital Inc and its founder, David Einhorn, were fined £7.2 million for trading on inside information in Punch Taverns.
Ten-Holter and Agnew are the first individuals, apart from Einhorn, to be fined in the case, but there are “ongoing investigations into other parties”, an FSA spokesperson told News Insurances on Monday.
