The Upper Tribunal has upheld a Financial Conduct Authority decision, finding that the former chairman of capital markets at JP Morgan Cazenove engaged in two instances of market abuse.
Ian Hannam was appealing a decision notice handed down by the regulator in February 2012 whereby he was fined £450,000 for two instances of market abuse including improper disclosure.
The Upper Tribunal announced today (28 May) it has upheld the FCA’s decision, following five days of hearing during July 2013 and October 2013, however the judgement said “the issue of the appropriate penalty to impose is to be dealt with on a later occasion”.
Mr Hannam can appeal this judgement.
The tribunal found that Mr Hannam had engaged in two instances of market abuse by disclosing inside information other than in the “proper course of his employment in two emails dated 9 September and 8 October 2008”.
The FSA’s decision notice said the emails to a prospective client contained inside information relating to Heritage Oil Plc, an existing JP Morgan client for which Mr Hannam was the lead adviser.
In its decision, the tribunal said: “Mr Hannam’s actions in sending both the September email and the October email constituted behaviour falling within section 118(3) of the Financial Services and Markets Act 5 2000. He was thereby engaged in market abuse.”
The tribunal also commented on the standards of behaviour it expected of professional advisers when handling inside information.
It said: “We consider that it could never be in the proper course of a person’s employment for him to disclose inside information to a third party, where he knows that his employer and client would not consent to the public disclosure of that information, unless he knows that the recipient is under a duty of confidentiality and that he knows that the recipient understands that to be the case.”
It was not part of the authority’s case that Mr Hannam deliberately set out to commit market abuse or that Mr Hannam lacked honesty or integrity.