THE Financial Services Authority (FSA) has fined a man more than £1m for market abuse in the first use of a tough new penalty system.
The FSA also took out a high court injunction against the individual – repeat offender Samuel Kahn – meaning he could face jail for contempt of court if he is caught again.
Kahn co-ordinated a scheme to deliberately inflate the share price of Global Brands Licensing (GBL), a company quoted on the PLUS Stock Exchange.
He disguised his involvement in the scheme by repeatedly impersonating other people when placing orders to trade in GBL’s shares and co-ordinating trades conducted by third parties.
The FSA says the profits were withdrawn from a third party’s bank account and delivered to Kahn, who has never worked at an authorised firm regulated by the FSA.
Tracey McDermott, acting director of enforcement and financial crime, said: “Kahn undertook a month-long campaign of market abuse. The FSA will not tolerate this type of repeat behaviour and will use all of our powers to ensure credible deterrence.”
Simon Morris of CMS Cameron McKenna called the punishment a “remarkable first” for the FSA but said it must now prove it can nail more “mainstream” cases.
He said: “This is a typical case of a fringe operator flouting the rules. Until the FSA digs into mainstream insider dealing the risk remains that the City will not take the message seriously.”