Thu. Sep 19th, 2019

Planet Compliance

Innovation & Regulation in Finance

FCA fines and bans financial adviser for insider dealing

3 min read

The Financial Conduct Authority (FCA) has today fined Mark Taylor, a financial adviser, £36,285 and banned him for a period of at least two years for engaging in market abuse.

The FCA found that Mr Taylor, an experienced financial adviser who had worked at Towry Limited for 2.5 years, bought shares in another firm, Ashcourt Rowan plc, off the back of inside information accidentally provided to him in his role at Towry.

Mark Steward, Director of Enforcement and Market Oversight at the FCA said:

‘There can be no let-up in tackling insider dealing and this case shows the consequences will be grave and serious ones for perpetrators, even in small cases like this one.’

In February 2015 Towry made an offer to acquire Ashcourt Rowan, a wealth management company, for £2.70 per share and discussions continued into March 2015 without a deal being finalised.

On 12 March 2015, before any public announcement had been made, an internal email was sent to all Towry staff stating that the firm had increased its offer for Ashcourt Rowan to £3.49 a share.  Following an attempt to recall the message, a further email was sent to all staff warning them not to act on the information as it was potentially inside information.

Having read both emails and the attempted recall, Mr Taylor, who had previously traded in shares for his SIPP account using a broker, used his online trading account to purchase 5,582 shares in Ashcourt Rowan for a total of £15,011.82.  After the public announcement of the increased offer for Ashcourt Rowan, Mr Taylor then sold his shares for £18,509.91 making a profit of £3,498.

The following day Mr Taylor contacted his broker to ask whether it was possible to reverse the trade as he feared that he may have been guilty of insider dealing.  The broker declined and reported the trade to the FCA as suspicious in accordance with their obligations.

Mr Taylor was dismissed from Towry for gross misconduct as a result of the incident.  Mr Taylor provided full admissions to the FCA in an early interview and agreed to settle at an early stage of the FCA’s investigation.  He also provided evidence of serious financial hardship; but for this, the FCA would have imposed a penalty of £78,819.

The FCA is minded to revoke the Prohibition Order after two years, on Mr Taylor’s application, in the absence of new evidence that Mr Taylor is not fit and proper.

The FCA statement can be found here.

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