The Financial Services Authority has decided to fine JP Morgan Cazenove's chairman of capital markets, Ian Hannam, £450,000 after it judged that he had disclosed insider trading information in two emails.
The regulator said that Hannam had committed market abuse - even if not intentionally - after disclosing insider information on Heritage Oil Plc to a prospective client, in emails on 9 September and 8 October 2008. At the time, Hannam was JP Morgan's lead adviser to Heritage and regularly spoke with its chief executive.
The matter will now go to the Upper Tribunal, after Hannam resigned and said he would contest the case there. Hannam also said he had been under immense pressure at work, and that no-one in his team had raised concerns about the information sent. The Tribunal will issue a verdict on whether to uphold or cancel the fine.
The September email contained information about a potential offer for Heritage and the October email contained information about a new oil find by Heritage, the FSA said.
As it issued a decision notice, the FSA said it "accepts that Hannam did not set out to commit market abuse, but considers that Hannam's failings were serious in view of his experience and senior position within JP Morgan".
Tracey McDermott, acting FSA director of enforcement and financial crime, added: "Inside information is extremely valuable and must be handled with care to ensure that it is properly controlled and that appropriate safeguards are observed. This applies to all market participants but is particularly important for senior practitioners who will regularly interact with a wide circle of contacts".
Hannam, who is currently understood to be advising the mining mega-merger between Glencore and Xstrata, said in a statement today: "It is important to note that the FSA has not challenged my fit and proper status and has accepted that I acted with honesty and integrity. It has also accepted that I was acting in the best interests of my client and no one benefited or was damaged."