The Financial Conduct Authority (FCA) has fined a former senior J.P. Morgan banker £450,000 after he disclosed inside information to contacts.
According to the regulator's Final Notice, Ian Hannam engaged in two instances of market abuse, evident from two emails sent in September and October 2008. At the time, Hannam was J.P. Morgan's global co-head of UK capital markets, and remains an approved person.
In 2008, Hannam was acting as lead corporate adviser to the oil firm Heritage. However, he also had contacts with other interests in Kurdistan, a region where the firm was exploring for oil. In the emails, he disclosed to contacts there was a "potential acquirer" of Heritage, and that the firm had recently discovered oil.
The FCA argued the disclosures related to Heritage shares trading on the London Stock Exchange and represented insider information.
The September email stated Heritage's corporate advisers were engaged in ongoing discussions with a potential acquirer of the firm, and specified these would take place in nine days' time, it noted.
In a 2012 report on Hannam, the regulator said: "This information [...] was specific enough to enable a conclusion to be drawn that these circumstances would be likely to have a positive effect on the Heritage share price."
However, Hannam did not anticipate his contacts would abuse the information he had shared with them, it added.
The banker contested the 2012 report by referring the decision to the Upper Tribunal. However, the Tribunal upheld the decision and the FCA has now issued the fine.
Hannam said the tribunal has provided helpful clarification: "The stringent tests that it has declared should be applied to the treatment of inside information will, of course, have implications for all those who work in the City of London's financial markets.
"I hope that, to this extent, my original referral of the matter to the Tribunal will benefit others who work in this environment, by ensuring that they too are now able better to understand the scope and effect of the relevant rules."